These are the critical settlement points for the DOT

After falling below the crucial 200-day moving average, Polkadot’s price has found support around $6.5. However, a sudden break below this fundamental support could trigger a remarkable short-term cascade.

Technical Analysis

By Shayan

The daily chart

A close examination of the daily chart reveals a period of uncertainty and sideways consolidation near the critical $6.5 level. The recent price action led to a break below the important 200-day moving average, which is currently at $7.1, indicating dominance by sellers seeking to penetrate the $6.5 support.

In the event of a successful breakout by the bears, a significant downtrend towards the crucial $5.5 support level is highly likely.

Conversely, if a sudden bullish shift occurs, buyers will target the vital 200-day ($7.1) and 100-day ($8.1) moving averages in the medium term.

Source: TradingView The 4-hour chart

Analyzing the 4-hour period, it is clear that Polkadot’s recent uptrend found substantial selling pressure around the critical resistance zone defined by the Fibonacci levels of 0.5 ($7.4) and 0.618 ($7 .8 $), resulting in a noticeable decline.

As a result, the price has embarked on a downtrend, indicating a prevailing bearish sentiment in the market.

This indicates the potential for a sustained downtrend towards the $6 support region, with price action in this area serving as a key reference point for predicting the future direction of the cryptocurrency.

Source: TradingView Sentiment Analysis

By Shayan

Given the recent significant decline and subsequent arrival at a substantial support area, traders may be eager to assess potential future price destinations in the event of a bullish reversal. In this context, the analysis of liquidity levels in the perpetual market could provide valuable information.

The chart below illustrates the settlement heat map of the Binance DOT/USDT pair. This heat map highlights price levels with notable liquidity that could influence the direction of the price trend.

It is worth noting that the recent significant decline was largely driven by aggressive short positions. As shown in the chart, the price region above the $6.9 threshold is accompanied by substantial liquidity in the form of buy stop orders, making it a robust resistance area .

Therefore, if sufficient demand returns to the market and triggers a bullish rally, Polkadot’s next likely destination would be the price zone above $6.9.

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TradingView Cryptocurrency Charts.