Is the DOT in danger of falling towards $5 soon?

Polkadot price has seen increased selling pressure, leading to a break below the important $6 support region.

This development indicates a bearish sentiment in the market, with the potential for a continued decline to the downside.

Technical Analysis

By Shayan

The daily chart

The daily chart reveals that the DOT has faced aggressive selling near the critical $6 support region, leading to a notable breach of this decisive support level. T

His underlines the intense selling pressure in the market, and it’s worth noting that it’s not isolated to DOT, but across all altcoins. The price has broken below the lower bound of a multi-month triangle and previous major swing lows, indicating notable bearish sentiment.

Also, the 100-day moving average has crossed below the 200-day moving average, indicating a death cross. This evolution further indicates a bearish sentiment. Given this context, the price will likely decline towards the substantial support region of $5 and may experience a period of consolidation around this level.

Source: TradingView The 4-hour chart

On the 4-hour chart, the DOT experienced increased selling activity, leading to bearish pullbacks. These pullbacks have resulted in the formation of a bearish price channel, with the cryptocurrency currently hovering around its lower limit.

After breaking below the crucial $6 threshold, the price completed a retracement to the broken level, further validating the bearish scenario.

The DOT is expected to face higher near-term volatility and continue to run towards the crucial $5.4 support. On a broader scale, a period of consolidation between $5.4 and $6 levels is expected in the medium term.

Source: TradingView Sentiment Analysis

By Shayan

After the recent break below the crucial $6 support region, Polkadot’s price has triggered a major long narrowing event, liquidating a notable number of long positions. This development is crucial to understanding possible future market movements.

The attached chart illustrates the potential liquidation levels in Polkadot’s price action, providing insight into where the smart money may be focused in the medium term. There is currently a significant amount of liquidity sitting near the $6 mark, which likely includes buy stop orders for aggressive short positions initiated near this critical threshold.

In the event of a bullish correction, the $6 mark will be a prime target for buyers aiming to capitalize on the liquidity and potentially complete a pullback to the previously broken support level.

Source: Coinglass

However, the ability of the price to gather liquidity at this level could also influence a sustained continuation of the downtrend.

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