[Polkadot (DOT) struggles to break $5 due to market pressure]
According to DOT’s daily chart technical indicators, a break above the $5 price mark may be challenging as selling pressure builds. As of now, DOT’s Directional Movement Index (DMI) shows that its negative indicator (-DI, red) is higher than its positive indicator (+DI, blue). When the +DI line is below the -DI line, it indicates a strong downtrend and sellers have more control over the market than buyers.
The greater the distance between -DI and +DI, the stronger the downward momentum. For DOT, the -DI line is at 40.69 while the +DI line is at 6.20, showing a significant downward trend. Additionally, DOT’s average directional index (ADX, yellow) is in an upward trend at 43.37. Generally speaking, when an asset's ADX rises and -DI is higher than +DI, it indicates that the downtrend is strong and likely to continue.
DOT is currently trading below its 20-day exponential moving average (EMA, yellow) and 50-day simple moving average (SMA, blue). An asset's 20-day EMA is a short-term moving average that reacts quickly to price changes, while the 50-day SMA is a longer-term moving average that measures the average closing price over the past 50 days.
When an asset trades below these key moving averages, it is a bearish signal and means short- and medium-term traders are selling the asset, causing continued downward pressure. DOT’s 20-day EMA and 50-day SMA may act as resistance levels. If DOT attempts to break above these averages, it may encounter selling pressure at these levels and resume the downtrend. If this happens, the price of DOT could fall to a nine-month low of $3.59, which was seen on Monday. However, if the coin begins an upward move and breaks above these moving averages, its price target would be $6.76.
