Polkadot might be headed for s sweep-the-lows event targeting $3.50 if market conditions persist.
Polkadot price shows weakness
Polkadot price might already be on its way to a jaw-dropping 50% decline. During the month of September, DOT, the innovative smart contract and gaming token, witnessed a 23% decline. An influx of volume was spotted during down days that was larger than the previous countertrend rally.
The indicator may be suggesting that the uptrend’s move is just a corrective structure as opposed to the start of a new bull run.
Polkadot price currently auctions at $6.35 as the bulls are finding resistance from both the 8-day exponential and 21-day simple moving averages. Investors should be on the lookout as the indicators may produce a bearish death cross if market conditions persist. If the cross occurs, a liquidation towards the $3.50 liquidity level dating back to 2020 stands a high chance of occurring.
Such a decline would result in a 40% decrease from the current market value.
The Relative Strength Index compounds the bearish idea as bearish divergences are subtly displayed within the current price range. The bull’s failure to retrace 50% of the current downswing is also a key proponent confounding an upcoming sell-off. A bullish spike will be needed to reset the divergence, or the downfall will be imminent.
Invalidation of the bearish thesis can occur if the bulls reconquer the $8.00 swing high produced on September 12th. If the breach occurs, an additional hike towards $10 could occur, resulting in an 85% increase from the current Polkadot price.
