Polkadot Head and Shoulders Pattern Analysis - Is it Possible to Drop to $3.47?

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Polkadot (DOT) has recently seen a price increase of 16%, but technical charts and network data indicate a risk of a pullback.

Head and Shoulders Pattern and Capital Flow: Bearish Signal

DOT's daily chart has formed a 'Head and Shoulders' pattern, which typically indicates a price decline. If it fails to break through the key resistance level of $7.56, the price may drop to $3.47, representing a decline of over 50%. Additionally, the Chaikin Money Flow (CMF) and Bollinger Bands indicators show rising selling pressure and weakening market momentum.

Declining Network Activity: Weak Fundamentals

Polkadot's daily active users have decreased to 4,200, and revenue has fallen to $1,118, indicating insufficient network activity, which may further drag down the price.

Support and Liquidation Risk

$6.80 is the current potential support level; if it drops to this range, it could trigger a wave of liquidations, exacerbating the price decline.

Summary

Weak signals from both technicals and network activity suggest that DOT may be facing a pullback, and investors should cautiously monitor market trends.

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