Polkadot (DOT) Crashes 11%—Can It Bounce Back to Hit $20 Soon?

Polkadot (DOT) has declined by 11.62% in the past 24 hours, dropping to $6.85 with a 24-hour trading volume of $619,673,488. 

Despite the short-term decrease, the cryptocurrency has seen a 4.17% increase over the last week. Polkadot’s current market capitalization stands at $10,388,102,929, with a circulating supply of 1.5 billion DOT tokens.

Polkadot’s price has been trading within a 24-hour range of $6.72 to $7.84, and over the past week, it has fluctuated between $6.60 and $7.88. 

Technical Indicators Signal a Bearish Trend

Technical analysis of the DOT/USDT trading pair reveals bearish market conditions. Polkadot’s price is trading below the 20-day moving average ($7.18), and the Bollinger Bands indicate downward pressure with immediate support at $6.50 and resistance near $7.18 and $8.

The Relative Strength Index (RSI) is currently at 41.88, suggesting that sellers have control as it remains below the neutral 50 level. A further decline in RSI toward the 30 range could signal increased selling momentum. 

The Awesome Oscillator (AO) also reflects negative momentum with a bearish histogram of -0.45, indicating the potential for additional downside movement.

Liquidations Highlight Selling Pressure

Data from Coinglass shows a sharp increase in long liquidations, with $1.23 million in long positions closed compared to $66,860 in shorts. This liquidation imbalance suggests that the recent decline in DOT’s price forced leveraged traders to close positions, exacerbating the selling pressure.

Binance and Bybit accounted for the largest liquidation volumes, with $342,820 and $503,340 in long positions liquidated, respectively. The data also shows a trading volume increase of 84.96%, reaching $993.71 million, while open interest decreased by 11.47% to $475.61 million.

Analyst Expectations for Polkadot

Crypto analyst Andrew Griffiths shared his view on Polkadot’s price movement, stating, “Polkadot is quite old and large, with a market capitalization already exceeding $10 billion. Despite its size, the target of $20 is realistic in the medium term.” 

He added that DOT’s consolidation above the 50-day EMA and recent test pump could signal future growth, potentially aligning with Fibonacci levels at 0.5 and 0.618.

Market participants may closely monitor DOT’s price action, especially around the $6.50 support zone, for signs of a potential reversal or continuation of the bearish trend.

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