Polkadot ($DOT ) Faces Potential Bearish Challenges: Daily Analysis
Polkadot ($DOT ) is showing signs of forming an inverse cup and handle pattern on the daily chart, a bearish technical formation that could indicate further downside if confirmed. Hereโs a closer look at the current setup and key levels to monitor:
๐ Pattern Analysis:
Cup Formation: A rounded top has formed, signaling waning bullish momentum, with resistance zones identified between $7.50 and $8.00.
Handle Formation: A consolidation phase is unfolding as a descending channel, aligning with bearish continuation patterns. The neckline near $7.00 serves as critical support.
๐ Key Levels and Projections:
Support at $7.00: A decisive break below this yellow neckline support could confirm the bearish pattern.
Target Projection: Using the cupโs height, the measured downside suggests a potential drop toward the $4.70 range, marked as a red support zone.
Upside Invalidation: A breakout above $8.00 would nullify the bearish scenario and could trigger renewed bullish momentum.
๐ Bearish Scenario:
If the neckline at $7.00 fails to hold and is accompanied by strong selling volume, DOT could face intensified downward pressure, driving prices toward the $4.70 target. The trajectory is illustrated by the red arrow marking the expected decline path.
๐ก Bullish Considerations:
Should Polkadot hold above the neckline and manage a breakout past $8.00, the bearish outlook would be invalidated, potentially setting the stage for an upward rally.
๐ Conclusion:
DOT's current technical setup leans bearish, with the inverse cup and handle pattern hinting at a downside target near $4.70 if the $7.00 support breaks. Traders are advised to monitor volume during critical moves, apply proper risk management, and stay alert for any invalidation signals.
Whatโs your take on DOTโs next move? Will it hold the neckline or plunge toward lower levels? Share your insights below!