Polkadot (DOT) price analysis 1 December: Are lower levels likely?
Polkadot could extend its decline in the short term
Polkadot (DOT) soared to an all-time high on 4 November, just before the launch of the first auction of parachains on the network on 11 November.
Acala, a decentralised finance (DeFi) protocol operating on the Polkadot network, tweeted on 18 November that it was the winner of the first auction. It raised over 32 million DOT from more than 81,000 community members.
Moonbeam Network, an Ethereum Virtual Machine (EVM) bridging protocol, announced on 25 November that it had won the second parachain auction. It raised over 35 million DOT from more than 200,000 contributors worldwide.
In a recent interview with Coindesk, Polkadot founder Gavin Wood likened Ethereum to bitcoin (BTC), “but with some extra scripting”. He said: “Users of applications that are built on Ethereum are enslaved to it in an economic sense.”
Wood said that it would not “make any sense” if users had to pay Google 1/10th of a cent for electricity for every single Google search. He said: “This is the key difference between the application model of free execution with Polkadot versus the smart-contract model of transactive execution that you get with Ethereum and Ethereum’s competitors.”
Could DOT go up after its recent correction, or will traders continue to book profits? Read the DOT price analysis to find out what the charts suggest.
Polkadot (DOT) price technical analysis: weekly chart
DOT’s price broke above the stiff overhead resistance of $44.50, but the bulls could not sustain the higher levels. Profit-booking above the psychological level of $50 pulled the price back below the breakout level.
The DOT/USD pair has started a correction that is likely to find support between the 38.2% Fibonacci retracement level of $37.21 and the 50% retracement level of $32.53. If the price rebounds off this support zone, the bulls will again try to resume the uptrend.
The bears are likely to defend the overhead resistance at $44.50 on any relief rallies. A break and close above this level could open the doors for a retest of the all-time high.
Conversely, a break and close below $32.53 could start a deeper correction to the 61.8% Fibonacci retracement level of $27.84. The deeper the fall, the longer it is likely to take for the resumption of the up-move.
Polkadot (DOT) price technical analysis: daily chart
DOT’s price has broken below the uptrend line, indicating that the bulls may be losing their grip. Generally, the breakdown from a critical support is retested as bulls try to push the price back above the level.
In this case, buyers will attempt to push the price back above the uptrend line. If they succeed, it will indicate strong demand at lower levels. The pair could then rise to $42 and later to $48.
Conversely, if the price turns down from the uptrend line, it will suggest that bears have flipped this level into resistance. The sellers will then attempt to resume the down move.
If the price breaks below $34, the pair could plummet to the strong support at $26 where buyers may step in.
Polkadot: Buy or sell at current levels?
Polkadot’s price analysis shows that the bears have pulled the pair below the uptrend line. If the bulls fail to push the price back above the uptrend line quickly, the selling may intensify and the pair may start its downward journey towards $26. This negative view will invalidate in the short term on a break and close above $43.
Whatever the outcome might be, your decision to trade depends on your attitude to risk, your expertise in this market, the spread of your investment portfolio and how comfortable you are about losing money. This analysis does not constitute investment advice. It’s important to make your own analysis before deciding to invest. You should never invest more than you can afford to lose.