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Analyzing the Head and Shoulders Pattern of Polkadot—Is a Drop to $3.47 Possible?🔥🔥🔥

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Polkadot price may decline
Polkadot (DOT) is trading at $7.20, up 2% in the last 24 hours, but trading volume has decreased by 9% to $290 million. In the past seven days, DOT has risen by 16%, but a bearish head and shoulders pattern has appeared on the daily chart, possibly indicating a drop to $3.47.

Bearish signs emerging
DOT has formed a head and shoulders pattern on the daily chart, attempting to rebound to the neckline resistance but facing multiple rejections, indicating weak buyer activity. The Chaikin Money Flow (CMF) is trending downwards, with selling pressure exceeding buying pressure. The histogram on the Bollinger Bands trend indicator is fading, showing weak bullish momentum. If buyers do not re-enter the market, it may trigger a downward trend.

Decreased network activity
Polkadot's network activity has decreased, with network metrics such as revenue and user numbers at their lowest levels in weeks, daily active users dropping to 4,200, and daily revenue falling to $1,118. If network activity does not increase, it may strengthen the bearish trend, pushing down the DOT price.

Liquidation heatmap analysis

The Polkadot liquidation heatmap shows that there are no immediate liquidation levels above or below the current price, which may lead to price consolidation. However, there is a hot liquidation zone at $6.80, and if the price drops to that level, it could trigger long liquidations, further driving down the price.

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