Even as the crypto market bounces back on Friday, one leading cryptocurrency that is still experiencing considerable bearish pressure is Polkadot (DOT), even though its price has posted a slight increase over the past 24 hours. At the time of writing, DOT/USD is trading at a little above $28.
The eighth most popular cryptocurrency by market cap, Polkadot has risen by more than 2.5% since Thursday but is still down by almost 30% over the past week. The downfall was triggered by the downbeat sentiment in the entire crypto market which gathered strength earlier this week after China clamped down on cryptocurrency transactions, causing leading digital currencies to crash.
Although DOT has recovered significantly from the previous session’s low of around $15, it still remains well below last week’s high above the key $50 level. Amid the ongoing volatility which is yet to stabilize in the crypto market, it is too soon to predict which way the price action in Polkadot could materialize.
On the fundamentals front, DOT/USD finds support from an announcement from Gavin Wood – the creator of the Polkadot blockchain network, about the start of the phase five on its Mainnet. The final phase of development will give the network decentralization and permission-less capabilities and is expected to be completed by the end of July. This announcement via a recent blog post comes a few days after the team announced an upcoming release of parachains, auctions and crowd-loads.
Key Levels to Watch
Technical analysis of the 4-hour price chart of DOT/USD reveals a bearish bias being signaled by the MACD indicator in addition to most of the moving averages. For now, the price sits not too far from the immediate support just above the $24 level.
In case more buyers enter the fray, to take advantage of the current weakness, we could see Polkadot price strengthen to $33 and then possibly make a play for the key $40 level in the near-term. However, with volatility being what it is, a sudden bearish turn in the overall mood among crypto investors could see the support at $24 break down, sending prices crashing below the $10 level.