Polkadot (DOT/USD) could be headed to $4 next. That was after losing 3.5% on Tuesday to claim a new low in the year of $5. The cryptocurrency was trading in a clear downtrend, paving the way for further declines.
The decline in DOT price reflects the general sentiment. Most cryptocurrencies were in the red, highlighting the significant impact that the FTX collapse had on the general sentiment. DOT has now lost 15% in the week, the biggest loser in the top 15 cryptocurrencies by market cap.
It should be noted that Polkadot has been seeing a surge in activity, a highlight that the platform is still a top choice. However, bears have none of it, as the price has gone in the opposite direction. That begs the question, why is this so?
It may be time to recognise the true essence of crypto – bringing onboard decentralisation. Platforms such as Polkadot have grown because of the key role they play. Thus, the previous gains in the native tokens have largely resulted from speculation. So, when risks set in, as it is currently, a bear market is bound to follow. Going by the risk-on sentiment, the current price dynamics of DOT show we need to prepare for a prolonged bear market.
DOT/USD Chart by TradingView
A technical outlook of DOT shows that the bear weakness intensified after a breakout candlestick at $6. The cryptocurrency is trading with weak momentum. That has left a system of lower lows and lower highs on the weekly chart.
Following a break below $6, DOT could remain in a bearish market for a little longer. The area around $4 provided some price action and should be watched.
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