Polkadot embraces support at $3.50 following a dire breakdown from September highs of $6.89.
DOT/USD recovery likely to be cut short by a bearish flag pattern as observed in the hourly range.
Polkadot is among a large number of booming governance over the network cryptocurrencies. Although the protocol is still in development, it has attracted a large user base who engages in the buying and selling of the official DOT token. Some of the features Polkadot promises to bring to the digital world include staking, bonding, true interoperability, economic, and transaction scalability among others.
Polkadot listing on Binance on August 19 led to a spike to $5.75 but again there was an immediate flash drop to $1.00 before the token stabilized under $3.00. The last week of August was arguably the most successful for DOT/USD as the governance token resumed the uptrend to highs above $6.50.
The rally continued into September but DOT/USD lost steam, leaving $7.00 untested. Amid the price rally, Polkadot’s market capitalization also grew significantly to the extent that the token was elevated to become a top ten crypto. Data by CoinMarketCap currently places DOT at the seventh spot with a market cap of $3.94 billion, ahead of Binance Coin (BNB).
DOT/USD 1-hour chart
Due to the selloff in the market last week, Polkadot tumbled to confirm the support at $3.50. The weekend session has been yielding for DOT as its price recovered above $4.00. However, the seller congestion at $5.00 is still intact.
In spite of the recovery, the formation of a bearish flag pattern on the short term 1-hour chart signals that DOT could plunge again to retest $3.50. To avert the potential loss, bulls must work hard to force the price above $5.00 and the 100 Simple Moving Average resistance at $5.24.
Luke has had a long interest in financial technology, especially cryptocurrency and blockchain. With a Bachelors degree in Journalism and Media, Luke is dedicating his writing skills for the digital currency sphere.He can be contacted at firstname.lastname@example.org