- Polkadot price action flirts with a new low for 2022.
- DOT trades near the oversold area in the Relative Strength Index, limiting further downside.
- Except to see a quick and steep recovery towards the end of the year.
Polkadot (DOT) price slumps again, this time by flirting with the low of 2022 at $4.41. Although this looks bearish with a few technical elements, DOT bears could be nearing the end as a turnaround is just around the corner. As trading volumes start to wear thin, a price reversal is nearby as the Relative Strength Index (RSI) is already trading in the oversold area.
Polkadot sees bears ready to get off the train
Polkadot has seen a sharp decline since its recovery in November. With a 37% fall in just four weeks, adding a new low for 2022 does not build a good case for DOT to be bought immediately. Add the break below the monthly S1 at $4.50 and the firm rejection on the topside on Thursday morning during the ASIA PAC session, and it rationally points to more lows. A turnaround could, however, be in the cards very soon.
DOT is currently seeing bears stretch this selloff as the RSI is trading near the oversold area and has already been trading across in the previous days. This means a minor new low for 2022 can be printed, and a sharp swing back up should be possible. Expect to see price action quickly spike up to $5 on thin volumes and should the US Dollar weaken further.
DOT/USD daily chart
The risk of more downside comes with that thin volume, as Polkadot bears could stick to their guns and not start buying to make a profit. In that case, expect a further decline towards $3.50 near the monthly S2 support level. That would provide the support needed to halt the decline for now.