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Polkadot (DOT) is struggling to hold above $4 after another drop on Tuesday, with buyers showing signs of weakness as the price nears $4.50.
DOT rose steadily to $5.11 in August, but all of that gain was lost as selling pressure pushed the price below its 20-day SMA, with buyers struggling to gain a foothold amid growing negative sentiment.
Polkadot (DOT) is struggling once again
Polkadot (DOT) has been in a mostly bearish trend since August 24, when it soared to $5.11 before sellers pulled it back down. In the last week of August, DOT fell below its 20-day SMA and the $4.50 price level, closing at $4.38 on August 27. On Saturday (August 31), DOT lost all the gains it had made during its run to $5.11, falling to $4.26. September started with DOT continuing to fall, recording a 4.46% drop to $4.07, just above the $4 support level.
Source: TradingView
The increase in buyer interest from low levels allowed DOT to bounce back on Monday, which resulted in DOT rising by 3.44% to $4.21. Despite a quick recovery, buyers lost momentum after failing to make it to $4.30, and sellers regained control on Tuesday, pushing DOT down to $4.07, down 3.33%. In the current session, DOT is struggling to hold above $4, with the price down 0.74%. Sellers pushed the price down to $3.88, but buyers prevented further declines, pushing DOT back above $4 to $4.10. Sellers are now back in control, with DOT trading at $4.04.
DOT's pivotal moment
Polkadot (DOT) is once again at a critical point, which could have a significant impact on the price action going forward. Buyers have failed to build momentum and resist the ongoing selling pressure, which has led to DOT trading in a downtrend. However, as you can see from the price chart above, DOT has two important levels to defend. The first support level that is at risk of being overwhelmed is $4. This level has previously held against selling pressure, and DOT has successfully bounced back.
If this level breaks, it will indicate overwhelming bearish sentiment and focus on DOT’s multi-year support level of $3.62. There is no doubt that DOT has strong demand at lower levels, but with demand waning at higher levels, it is unlikely to return to $5, at least for now. Buyers will need to see DOT stay above $4 and reclaim the $4.50 level, which could indicate a change in sentiment. As you can see on the price chart, the MACD is currently bearish. The RSI is also well below 50, indicating bearish sentiment.
New partnership
Investors and market experts are hoping that the recent partnership between Polkadot and Inter Miami will act as a catalyst to drive up the price of DOT. The collaboration will see the Inter Miami first team wear the Polkadot logo on their training kit, giving the protocol significant exposure to soccer fans around the world.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.
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