Polkadot (DOT) Falls to Lowest Weekly Close Since 2020

Polkadot (DOT) recently experienced a significant breakdown as it fell below the crucial $4.20 support level, marking its lowest weekly close since 2020. This decline has raised concerns among investors and analysts alike.

DOT has been following a bearish trajectory since reaching its yearly high of $7.90 in February 2023. It slid below the $4.20 support level, which had held since the beginning of the year. Such breakdowns from long-standing support levels often trigger substantial declines.

Chart by TradingView

The conjunction of this support area and a descending resistance line has formed a descending triangle, a bearish pattern that underscores the breakdown and hints at the possibility of further losses.

Potential scenarios

If the downtrend persists, DOT's price could potentially drop by another 50%, reaching the $2 horizontal support area, aligning with its all-time lows from August 2020.

However, if DOT manages to reclaim the $4.20 area and break free from the descending resistance line, it could trigger an impressive 85% price surge toward the $7.50 resistance area.

The weekly Ultimate Oscillator, a momentum indicator used to determine overbought or oversold conditions, supports the prevailing downtrend, with readings below 50 and a declining trend considered bearish signals.

Bottom Line: Despite the bearish predictions for DOT, a potential breakout from the channel and the $4.40 area could pave the way for an 85% surge toward the $7.50 resistance region.