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Bitcoin had another sell-off, lowering its value to $32,700. Polkadot, like BTC, lost more than 5% of its value in an hour and may be headed lower.
Polkadot hourly chart
After dropping 18% from its value within 13 hours, DOT’s price dropped to $20.56. Retracement hit resistance at $22.04 and thus, began the current downtrend.
With the recent drop in the bitcoin market, volatility has increased. As the market remained volatile, traders were actively realising profits, with some ‘buying the drop.’ A similar tug of war was seen in the DOT market, with the price remaining below the 23.60 percent Fibonacci retracement line.
While the majority of traders expected the price to fall and sold, there was a party pushing for the price to rise by purchasing the drop. The stochastic RSI was below the signal line and was going into the oversold zone. This was a hint of intense selling pressure, and when the RSI fell, the price may follow suit.
Money also left the market as a result of the decline in the value of DOT. The sellers who made a profit and walked away were looking for an entry point. As the price has continued to fall, we may have to wait till money returns to the DOT market. Chaikin Money Flow fell below zero when bearish volatility kicked in, indicating that money was departing the market. As long as CMF is around -0.13, the market may continue under pressure.
The Polkadot market was experiencing negative volatility. The selling pressure has been severe over the last day, and it is possible that the value of DOT may continue to fall. It may find support at $20.56, but if that fails, the asset may fall to $19.7.