Polkadot under Pressure, DOT Capped Below $23

Polkadot Drops 13% in a Retest, Primary DOT Support at $8.5
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Polkadot prices are underperforming, trailing the USDT as per the performance in the daily chart. Overall, the path of least resistance from a top-down approach is southwards as long as DOT buyers cannot clear above critical liquidation levels.

Technically, there are hints of strengths. However, the inability of traders to muster enough buying strength and clear $23 is diffusing the upward momentum, swinging price action in favor of DOT sellers. This is at the back of solid fundamentals buoying Polkadot. Its creators are keen on developing its ecosystem by building an internet of blockchain.

Polkadot Parachain Slot Auction

Towards this end, the ongoing Parachain slot auction is proving a success. Polkadot aims to be the platform where only high-quality projects with proven security, boasting of unique selling points, will deploy.

Winners of Parachain slots will derive the interoperability of the underlying Substrate as they aid in scaling Polkadot for a closed-looped cross-chain system beneficial to the industry.

Eventually, there will be 100 Parachains plugged into the mainnet, helping scale Polkadot while keeping transaction costs relatively low. At the same time, there will be investment positions for investors who can support any of the projects seeking to be Parachain in return for their valuable tokens.

Already, some of Polkadot’s Parachain are keen on contributing to the ecosystem to boost development. Astar announced a $100 million development fund to provide liquidity, offer financial support, and incentivize programs for smart contract developers.

Polkadot Price Analysis

Polkadot price analysis

Polkadot prices are up roughly 20 percent from January 2022 lows but down 65 percent from H2 2021 highs as per the candlestick arrangement in the daily chart.

Although bulls are hopeful, sellers have the upper hand as the DOTUSDT slope is negative. Technically, $23–a strong liquidation level must first be cleared for the uptrend to be valid. Even so, at spot rates and driven by fundamental factors, aggressive traders may load the dip in anticipation of a solid break above $23 towards $32—and better.

Overall, risk-averse traders can wait for a reaction between the $15 and $17 support and $23 before trading with the emerging trend.

A close below $15 and January 2022 lows would affirm sellers from mid-November 2021. This could, in turn, force DOT lower towards $10—H2 2021 lows.

Technical charts courtesy of Trading View

Disclaimer: Opinions expressed are not investment advice. Do your research.

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