Polkadot's price rallied roughly 110% between July 20 and August 8. After piercing the supply zone ranging from $19.14 to $20.61 level, and setting up a swing high at the price of $21.72, DOT has dropped 13%.
This descent has pushed Polkadot price below the said area of resistance level, which is a bearish sign. While the downswing was evident after such a massive price uptrend, investors can expect it to extend lower, especially since the Momentum Reversal Indicator has flashed a sell signal in the form of a red ‘one’ candlestick pattern on the 12-hour chart. This setup often forecasts a one-to-four candlestick correction.
The immediate support level at the price of $18.34 is the first level sellers will encounter. Breaching $18.34 will push the DOT price down to $17.01, roughly 12% from the current position, $19.34.
Although it is unsure if the sell-off will continue after the $17.01 level if the recent upswing was a shift in the narrative to bullish, investors can expect an upswing to originate here.
Regardless of the selling pressure, if the buyers make a comeback pushing Polkadot price above the supply zone’s upper limit at a price of $19.14, it will indicate that an upswing is likely to survive.
A confirmation of the price bullish outlook will arrive after the DOT price produces a bounce off the $19.14 barrier. If this were to occur, market participants could expect a 15% ascent to $23.666.
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