• DOT’s recovery was hindered by the U.S. SEC recently categorizing it as a security and macro headwinds, leading to a decline in its price.
• A Fair Value Gap (FVG) of $4.53 – $4.8 has been left behind after the plunge on 10 June, which aligns with a key resistance level in late December 2022/early January 2023 ( $4.689).
• The Relative Strength Index (RSI) hit the median mark and could face little resistance while the Chaikin Money Flow (CMF) crossed above zero mark sharply, denoting massive capital inflows into DOT.
DOT Moves Toward Bearish Zone
Polkadot [DOT] is just one of the assets mentioned by the U.S. SEC as security during a recent Binance lawsuit, resulting in a massive drop over the past week ( 5-10 June). The plunge eased on 10 June, setting DOT to attempt to reverse recent losses at press time of trading at $4.661, up 3% in the past 24 hours as per CoinMarketCap.
Fair Value Gap
The extended drop on 10 June left behind a Fair Value Gap (FVG) of $4.53 – $4.8 which aligns with a key resistance level in late December 2022/early January 2023 ($4.689). This FVG zone is now a key roadblock for bulls to clear and if they fail to do so, sellers could retrace lower to around $4.33 0r $4.2 as short-selling targets instead .
Relative Strength Index & Chaikin Money Flow
The Relative Strength Index (RSI) hit the median mark and could face little resistance while attempting move up whereas Chaikin Money Flow (CMF) crossed above zero mark sharply indicating massive capital inflows into DOT..
Negative Funding Rate
Most Centralized Exchanges posted negative funding rates for DOT since 10 June making it harder for shorts to enter positions discouraging them from doing so,.
Conclusion
In conclusion although there are some roadblocks that bulls have failed thus far still if they manage to close above FVG zone at $4:80 will invalidate this bearish thesis but another FVG zone of $ 4:84-$ 4:93 might still act as an obstacle near previous range lows of 5$.