As altcoins continue to bleed out, DOT showed signs of weakness and posted a minor loss today. Having registered more than 30% loss in a month, it currently looks poised for another major breakdown.
Looking back from where the price started to drop in December, DOT’s bearish outlook is turning stronger on a short-term scale. In fact, things could get uglier if the trend remains bearish throughout this month – this could end the first quarter in massive loss.
However, it has traded sideways for a month and is now showing signs of weakness again following a double-digit loss since the beginning of the week. This meltdown was triggered by a rejection at $5, and as seen on the daily chart, it is priced at $4.2 at the time of writing.
Currently, it is on the verge of breaking down on the daily chart. This could cause a major dip as the crypto will likely lose momentum soon. The $4 level is a key support to watch for a breakdown. A strong daily close under this level should send the price to a new multi-month low.
Technically, the past months of drops look more like a period of contraction. A big expansion should be expected once the asset gathers momentum on a weekly scale. As of now, the supply level is increasing.
Source: Tradingview
The bears currently target $4. If the price passes through this level to reclaim the previous monthly $3.78 low, the next level to consider for drops would be $3 and probably $2 in the mid-term.
If DOT manages to climb back above $4.45 as a result of a bounce back, we can anticipate an increase to the $5.4 resistance. Higher levels to watch for a push are $6.5 and $8.
Key Resistance Levels: $4.45, $5.4, $6.5
Key Support Levels: $3.78, $3
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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