DOT Technical Analysis: Currently in a Downward Phase, the Month Saw an ATH of $55

Ankita  |  Nov 25, 2021

Polkadot is an open-source sharding multichain protocol that facilitates the cross-chain transfer of any data or asset types, not just tokens, thereby making a wide range of blockchains interoperable with each other. Polkadot (DOT) was founded by the Web3 Foundation, a Swiss Foundation founded to facilitate a fully functional and user-friendly decentralized web, as an open-source project.

Let us see the technical analysis of DOT.

Past Performance

The YTD chart shows that this year was full of ups and downs for DOT. It has witnessed long uptrends and long downtrends. Currently, it is on a downtrend after making an all-time high of $55 this month.

The previous week witnessed a decrease of 10.2%. On November 18, 2021, it opened at $42.73, after which it closed on November 24, 2021, at $38.37.

TradingView Chart

DOT Technical Analysis

The current trading DOT price is giving a positive signal for the day-ahead as it is trading 0.37% higher than the previous day’s close. However, let us look at the indicators before making a call.

The buying volumes are beginning to be dominated by the selling volumes in the OBV graph. This is in alignment with the price chart’s downtrend and is further likely to push the price downwards.

Looking at the Relative Strength Index, we again notice that the price has lost its strength as the RSI is currently at 39.79. However, low RSI means that a trend reversal may be seen soon.

The fast line and slow line in the MACD graph have started to move in the negative direction. This is a negative signal for the traders.

Day-Ahead and Tomorrow

The impending release of Ethereum 2.0 may lead to a pullback in the price of DOT. As Ethereum gas fees become cheaper and transaction speeds increase, other chains may fall to the wayside. It is possible Polkadot may suffer from this upgrade. That said, Polkadot offers real-world use cases and solves important pain points that few other blockchains have attempted to tackle. Accordingly, there's reason to be bullish on this token's long-term potential for above-average returns.

On doing Fib Retracement, we find that the DOT is approaching the last Fib level at $37.53, while it has already crossed the previous fib levels. Earlier in the week, it took support at this level, to later face resistance at $1.67 pivot.

Thus, the indicators are wary of the price chart. They indicate that in the coming days, the price is likely to decline. The traders may consider exiting the market by placing a stop-loss at $35.26. However, if the trend reverses, they may set a target at $45.

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