Polkadot (DOT) is motionless, not showing significant momentum in either direction. However, the bearish pattern indicates the possibility of a correction in the near future.
Polkadot is losing investor support
The Sharpe ratio measures the risk-adjusted return of an investment. Higher values indicate the effectiveness of the asset, while low values indicate unprofitability. At the time of writing, the DOT ratio is -4.32, indicating a lack of incentives for traders and investors.
Technical indicators do not add positivity to the situation. The relative strength index (RSI) attempted to break through the critical threshold of 50, indicating a potential trend change, but retreated back into bearish territory. Although the price of Polkadot is still far from oversold, the failure to gain a foothold above the 50 mark should be considered an additional hint of an upcoming fall.
DOT Price Forecast: Support at $7 will not hold
At the time of writing, DOT is trading within a descending parallel channel, struggling to confirm the $7 level as support.
However, given the above signals, the asset is likely to fail and hit the lower border of the channel at $5. Meanwhile, a successful rebound from $7 could refute the bearish thesis. In this case, DOT will test the nearest resistance levels of $8 and $9.
About Polkadot (DOT)
Polkadot stands as a decentralized Web3 platform designed to integrate diverse private and public networks, oracles, and other technological solutions. Its goal is to enable independent blockchains to share information and transactions through the Polkadot relay chain. This ecosystem fosters the creation and interconnection of decentralized applications and services.
The network’s token (DOT) functions as the governance asset of the network, granting owners a level of control over the protocol. Furthermore, a reward mechanism has been devised wherein active and beneficial network participants receive tokens, while those acting against the network’s interests face a reduction in their network stake. Ultimately, the DOT token plays a crucial role in adding and removing blockchains within the Polkadot ecosystem.
