• Polkadot price seems to be facing some short-term selling pressure.
  • Bulls need to defend a critical support level to prevent DOT from falling further.

Polkadot has rebounded strongly from its low at $4.43 established on November 26 and managed to reach $5.53, aiming to set a new 2020-high. Unfortunately, an important indicator suggests DOT is poised for a pullback in the short-term.

Polkadot price facing strong selling pressure

On the 9-hour chart, the TD Sequential indicator has presented a sell signal that seems to be getting a lot of follow-through bearish action. The 50-SMA is acting as a strong support level at $5.10.

dot price

DOT/USD 9-hour chart

A breakdown below the 50-SMA would be a clear bearish sign capable of driving Polkadot price down to the 100-SMA at $4.7. Additionally, it seems that the TD Sequential is also on the verge of presenting a sell signal on the 3-day chart.

dot price

DOT/USD 3-day chart

The current green ‘8’ is a strong indication of a potential incoming green ‘9’ sell signal like the one in the 4-hour chart. This increase in selling pressure gives bears the upper hand in the short-term.

However, if the bulls can decisively defend the 50-SMA support level on the 9-hour chart and push Polkadot price above $5.5, the digital asset could quickly rise to new highs above the 2020-high at $6.08.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

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