Polkadot faces bearish sentiment as price tests key support levels

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Polkadot price tests key support amid bearish trend

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Jainam Mehta

09.01.2025

Polkadot faces bearish sentiment as price tests key support levels — Polkadot price approaches critical support levels in a bearish trend

Polkadot (DOT/USD) continues its downward trajectory, with the cryptocurrency testing crucial support levels amid sustained bearish pressure. The price hovers near $6.68 as sellers dominate the market, pushing the token toward lower bounds after forming consistent lower highs and lower lows across multiple time frames.

Polkadot remains vulnerable to further losses if key support levels are breached. A breakdown below $6.51 could lead to a slide toward $6.00 or lower, while a breakout above $7.14 could signal a recovery, targeting $8.00 and beyond.

Polkadot price movement (Dec 2024 - Jan 2025) Source: TradingView.

4-Hour Time Frame: Bearish Momentum Dominates

The 4-hour chart underscores the persistent bearish trend, with DOT trapped under a descending trendline. Resistance levels at $7.01 and $7.94 have proven formidable, rejecting upward attempts. The 50 and 200 EMAs remain above the current price, signaling strong bearish sentiment. Support sits at $6.51, close to historical lows, reinforcing the need for buyers to defend this zone.

The RSI hovers near oversold territory, suggesting that selling pressure could soon exhaust, but further declines remain possible without bullish confirmation. The presence of multiple "Bear Wicks" reinforces the bearish stance, highlighting failed upward price movements.

Short-Term Consolidation in 30-Minute Chart

Short-term analysis reveals a descending triangle pattern on the 30-minute time frame, a classic indicator of bearish continuation. Resistance levels at $6.82 and $7.00 remain intact, while support at $6.49 serves as a critical pivot. Despite weak bullish attempts, trading volumes near resistance remain low, indicating limited buying momentum.

The widening gap between the 20 and 50 EMAs suggests increased bearish momentum. A breakdown below $6.49 could confirm a move lower, while a temporary rebound could occur if buyers reclaim key levels.

The daily time frame showcases a symmetrical triangle pattern, signaling an upcoming decisive move. Resistance near $9.99 represents a critical upper boundary, while $6.04 serves as the lower support. The MACD is likely in a bearish crossover, further reinforcing negative sentiment. However, the RSI nearing oversold levels indicates the potential for a short-term recovery.

In our previous analysis, we discussed how Polkadot was consolidating near $7.27, forming a symmetrical triangle with potential breakout targets of $10.88. The recent decline signals that bearish momentum has taken precedence, requiring a cautious approach as the price approaches key support zones.

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