The past few days have been tough for all altcoins. Polkadot (DOT) in particular seems to have suffered greatly from this situation. The local crypto currency of the Polkadot ecosystem has decreased by 10% in the last week, according to Coingecko data.
The correction of the cryptocurrency comes as Bitcoin (BTC), Ethereum, and especially altcoins are slowly falling. While BTC does not drop below technically significant levels, DOT reaches a point where it could face a serious correction if it drops below a significant support level. The support level has remained stable multiple times in recent weeks, suggesting that a drop in this level would be disastrous for the bulls.
Polkadot Approaching Critical Support Level
The leading altcoin Polkadot is facing an even stronger correction as it approaches a significant macro support level. A cryptocurrency trader shared the chart below on October 3 and stated that DOT is preparing to drop below the daily support level of $ 4 at least five times last month.
If DOT loses this level, it could face a correction in the $ 3.00 range. The analyst used the following statements on the subject:
“We have another trend resistance followed by another touch of support almost a week later. This doesn’t look good. HTF is very important for all the transactions I do right now. I cannot emphasize this enough. No interest for less than 4H / 1D! ”
This concern was echoed by other analysts who noted that DOT losing the $ 4 support could lead to a decline towards the $ 3 range and potentially fall further if there is sufficient sell-side pressure.
Taking A Part Of Ethereum’s Market Share On DeFi
DOT has some potential underpinnings that could keep it from falling further. Basic principles include Polkadot taking some of Ethereum’s dominance in the decentralized financial market.
Ethereum users have faced extremely high transaction fees in recent weeks, which could allow Polkadot developers to deploy relatively inexpensive and efficient applications, thereby adding value to DOT.
Polkadot was trading at $ 4.21 at the time of writing.