Disclaimer: The results of the following analysis are the only opinions of the writer and should not be considered investment advice.
USDT Dominance is a metric of the share of cryptocurrency market capitalization held by USDT. For the past two weeks, this metric has been on the rise. This showed that market participants were increasingly choosing to hold the USDT stablecoin rather than any crypto asset and highlighted periods of pressure to sell.
Polkadot also saw strong bearish momentum in recent days as it fell through another support zone on the price charts.
DOT- 12 hour chart
On the 12-hour chart, there were many levels that had served as support over the past three months that eventually reversed into resistance.
The most important support areas have been highlighted by the red box. The $ 9.5 zone was an area that the bulls badly needed to break out of. The psychological level of $ 10 was just above the head and the technical level of $ 10.57 was only slightly further north.
After the sudden crash in early May, DOT buyers desperately tried to defend the $ 9.5 region. However, June brought more fear and the bulls were soon overwhelmed. Subsequently, the price dropped to the $ 6.6 level, where it tried to bounce back several times.
The most successful of these attempts managed to climb to $ 9.68. Although it measured 43% in magnitude, it was still a failed rally as it failed to overturn the long-term market structure to the upside.
Over the past few weeks, the price has also fallen below the $ 6.6 area and at the time of writing it has seen a rebound from $ 6 to reach the former support region again.
Hence, traders with longer lead times can look for shorting opportunities. Based on the Fibonacci (yellow) extension levels, a drop to $ 6 and even $ 4.94 could occur in the coming weeks.
The indicators also showed a bearish picture. The RSI has fallen below neutral 50. Even during the rally to $ 9.6, the RSI was unable to break out of the region 60 and show strong bullish momentum over the H12 period. The OBV also fell below a support level.
The Directional Movement Index saw ADX (yellow) at 24.5 and -DI (red) at 19.5. So the indicator was also on the verge of showing a strong bearish trend taking place.
Intraday traders can look for shorting opportunities behind Polkadot after an examination of the H12 timeframe showed a bearish trend. The selling pressure behind Bitcoin over the past couple of weeks meant another downward movement was likely.