Polkadot (DOT) price broke below long-term support


Polkadot (DOT) price broke the long- and short-term support levels to indicate that it remains in a bear market.

Polkadot price had fallen below a descending resistance line since November 2021 when it was trading at an all-time high of $55.09. The price of DOT reached a low of $4.41 on 21 December.

The downside movement led to a break above the $5.90 horizontal support area. The area is now expected to provide resistance. At the time of the breakdown, the zone has been in place for 805 days.

Furthermore, the decline in DOT price invalidated the bullish divergence on the weekly RSI (green line). Since the divergence developed over five months, its invalidation is a decisive bearish signal.

If the downside momentum continues, the next closest support area will be at $3.85.

Conversely, a break out of the descending resistance line would invalidate this bearish price forecast.

Polkadot (DOT) Price Weekly Resistance
DOT/USDT weekly chart. Source: TradingView

Short-Term Polkadot Price Breakdown

Technical analysis from the daily time frame shows that DOT coin declined below the $5.10 support area on December 16 and broke from a descending wedge during the next 24 hours. Since the descending wedge is considered a bullish pattern, its breakdown is a bearish development that invalidates the possibility of an upward move. This is also in line with the readings of the weekly chart.

While the daily RSI has reached oversold levels, it has not generated any bullish divergence. As a result, the most likely scenario is a continuation of the downside move towards $3.85. Retesting the wedge and the support line of the $5.10 area indicates that a rather bullish reversal has begun.

To conclude, Polkadot price turned bearish as it broke above the long and short term horizontal and diagonal support levels. Furthermore, the technical indicators are not showing any bullish reversal signals. A decisive move above $5.10 would be needed to negate these bearish signals.

Polkadot (DOT) price descending wedge
DOT/USD Daily Chart. Source: TradingView

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