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Polkadot is regarded as the blockchain of blockchains.
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Native token DOT has been bearish slightly above the $6.5 support.
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If DOT breaks below $6.5, the price could fall further to $4.
Polkadot’s native token DOT/USD is trading at 6.73. The price is close to or at a support of $6.5, the lowest since January 2021. Although the price recovered to a high of $8.45 in recent weeks, it has since lacked a bullish impetus. Investors should watch $6.5 as it could be a turning point for DOT or start a further decline.
Polkadot is described as a “blockchain of blockchains.” It connects blockchains that would otherwise be incompatible with each other. It unlocks value by allowing data transfers across blockchains. In line with the goal, Polkadot launched a cross-chain messaging system in May. The system allows native transfers of tokens across parachains. Polkadot’s native token DOT allows staking and governance on the protocol. It is also available for trading in other exchanges.
Just like other cryptocurrencies, DOT has been highly volatile. It once traded at a high of $56 in November last year, at the height of the crypto boom. The recent crypto weakness means that DOT is yet to stage a lasting comeback.
DOT risks another low if $6.5 support fails to hold
Source – TradingView
The MACD line closed below the moving average, signaling a bearish move for DOT. A RSI shows oversold conditions, but the price is yet to hit the support. More weakness in the price is expected as bearish sentiment prevails. A bullish reversal could occur at $6.5. Failure to reverse at the support would open DOT to further decline to a support around $4.
Summary
DOT/USD is bearish approaching a key support of $6.5. If the price fails to rebound at the support, the crypto token could proceed to $4. Investors should watch $6.5 for price action. Still, there is no indication the price will go higher at the support. Buyers should be prepared for further downside.