The Polkadot token has crashed by double digits prior to now two weeks
The cryptocurrency was among the many tokens closely shorted on main exchanges
DOT maintains a downtrend and the subsequent stage to look at is $3.9
Barely two weeks in the past, bets in opposition to many altcoins have been on the rise. Santiment information indicated that Polkadot (DOT/USD) was among the many cryptocurrencies focused by shorts on main exchanges. On the time of Santiment information on December 10, DOT was buying and selling at $5.3. The cryptocurrency now exchanges fingers at $4.5, a lack of 17%. Are the brief positions answerable for this?
The particular reply to the query could possibly be sure, though that’s not at all times the case. Elevated brief positions can truly increase an asset’s worth. That occurs when traders cowl their brief positions, resulting in a market phenomenon often known as a “brief squeeze.” Nevertheless, because it seems to be, there aren’t any indicators of a brief squeeze for DOT. The cryptocurrency maintains a downtrend, in all probability orchestrated by elevated promoting.
DOT outlook as worth heads to the 2020 lows
DOT/USDT Chart by TradingView
Turning to the weekly chart offers a glimpse of Polkadot buying and selling for the reason that bull market began. From the chart, DOT trades at its lowest stage since December 2020. Evidently, the cryptocurrency has misplaced all of the features it amassed in the course of the bull market of 2021.
The amount indicators present that liquidity is waning as DOT heads decrease. The value is about to seek out help at $3.96 subsequent. The present worth zone may curiosity consumers since that is the place the bull market began.
It might be fascinating to see how the DOT worth behaves at or round $4. Any potential bullish reversal ought to begin right here. There is no such thing as a indication of that but, because the cryptocurrency stays very bearish.
Consumers may maintain DOT in consolidation mode on the essential zone earlier than discovering the vitality to interrupt larger. DOT-related developments and improved sentiment within the broader crypto sector are the occasions to look at. A bearish break at $3.9 may pit DOT under $2.
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