Polkadot price prediction: DOT price sideways to lower
- Polkadot price slips and loses gains from Monday.
- DOT price starts to make clear to investors that price is trading sideways.
- Expect another round of dollar strength as the greenback has taken a small step back these past few days.
Polkadot (DOT) price action is set to trade sideways to lower as bulls failed to push the price action higher despite the dollar backing off on Tuesday. From now on, traders can expect DOT price to trade sideways between the 55-day Simple Moving Average on the upside and the monthly S1 to the downside, which it is eventually expected to break below and then test $6.23 support. This comes as the dollar strength is set to return after its rally took a short pause.
DOT price in search of the bottom
Polkadot price action is still recovering from the full pairing back it underwent on Tuesday as bulls dropped the ball in their attempt to print higher prices in Polkadot. The issue came as equity markets took a step back and dragged cryptocurrencies with them. Although no more specific news or headlines triggered anything, it looks like markets and investors are starting to be on edge over the jobs report on Friday after the job openings report on Tuesday only showed an increase in the openings, with no cooling down as such. This suggests the Fed will continue to adopt a hawkish stance providing a headwind for cryptos.
DOT price is thus set to trade sideways to lower at the top of the 55-day Simple Moving Average (SMA) at $7.76. That level already did its duty in refraining bulls from trading higher last week. At the bottom, the monthly S1 support level underpins price action near $6.75 but could break should the dollar strengthen towards Friday. This means that $6.23 could be up for a test and provide a level where bulls and investors may buy into the opportunity.
DOT/USD Daily chart
Alternatively, there is a chance the DOT price rally could break above the 55-day SMA based on a fundamental change in the current macroeconomic backdrop. Should, for example, the wages in the US job report on Friday show a slowdown or decrease, that could be an omen of more declining inflation, which is exactly what the Fed is looking for, and suggest the adoption of a less hawkish policy response going forward. That would mean positive news for cryptos and see DOT price break above $8.00, opening up room to rally towards $10.35 in the near-term.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
