The price of Polkadot (DOT) fell to a low of $7.18 on May 12. The May 12 plunge brings temporary relief to bulls as the downtrend has eased.
Over the past week, the cryptocurrency price has been hovering between $7.18 and $12, fluctuating between these two levels. The downtrend stalled at the low of $7.18. The May 12 candlesticks show a protruding long tail.
The long tail indicates that there is strong buying pressure at the current support. This means that this support is likely to hold. On the upside, DOT has corrected higher but was rejected at the $12 high. The upside is hindered as the bears sold off at the recent high. Meanwhile, DOT/USD will continue its movement within the trading range as long as the boundaries of the trading range are not breached.
The current uptrend is driven by buyers emerging from the oversold zone. Incidentally, the price of DOT has risen to the value 37 of the Relative Strength Index for the period 14. The market is still in the downtrend zone and is capable of further downward movement. Polkadot is below the 40% area of the Stochastic on the daily chart. The market is in a bearish momentum. The 21-day line SMA and the 50-day line SMA are sloping south, indicating a downtrend.
Major Resistance Levels - $52 and $56
Major Support Levels - $28 and $24
The DOT price is still in a downward correction as the price fluctuates in a range. Meanwhile, the May 12 downtrend has shown a candle body testing the 78.6% Fibonacci retracement level. The retracement suggests that the price of DOT will fall to the Fibonacci extension level of 1.272 or the level of $3.89.
Disclaimer. This analysis and forecast are the personal opinions of the author and are not a recommendation to buy or sell cryptocurrency and should not be viewed as an endorsement by CoinIdol. Readers should do their research before investing funds.