Polkadot (DOT) could fall below $10

The latest technical indicators for Polkadot are signaling a potentially turbulent time for this altcoin. The bearish EMA cross on the hourly chart indicates a loss of upward momentum for the DOT price. Meanwhile, the trending RSI indicates that the asset may be overbought.
These technical patterns suggest that Polkadot's recent support level at $10 may soon be severely tested. Investors and traders should brace themselves for sharp moves as bearish signals begin to dominate the short to medium term.

Polkadot developer activity declines

DOT developer activity increased from 13.10 on February 13 to 17.85 on March 1, showing an upward movement of 36.26% in about 2 weeks. However, after this significant increase, developer activity fell hard from $17.14 to $15.29 between March 7 and March 8.
Historically, the dynamics of developer activity and DOT prices have been correlated. However, the correlation has become weaker over the past few weeks, indicating that these indicators may be diverging. As you can see, despite the decline in developer activity, prices have increased in early February 2024.
However, since these indicators are historically correlated, we can expect that the recent strong decline in developer activity could have a large impact on the DOT price.

RSI levels for Polkadot are a concern

The Relative Strength Index (RSI) for the DOT recently exceeded the 74.7 level. RSI readings at this level suggest that the asset is potentially overbought. This means that the altcoin's price may be considered too high compared to its recent price history and could indicate an impending reversal or decline.
The correction did not immediately follow the recent RSI 74 crossing. In fact, the price rose from $6.12 to $9.07. However, after peaking, the price fell to $6.71 in 7 days, which is a 26 percent retracement.
The RSI indicator is calculated based on the average of the rise and fall of the price over a certain period. It uses the changes in price from one period to the next to determine whether the trend is upward or downward. Generally, an RSI above 70 is considered overbought and an RSI below 30 is considered oversold.
While an RSI above 70 does not necessarily mean an immediate correction, it is important to keep an eye on it. It recently went from 64 to 74 in 2 weeks.

DOT price forecast: bearish cross signals on the EMA

One of the most telling indicators of future price movement is the crossing of the exponential moving average (EMA).
In the case of the DOT, the immediate support level is in the neighborhood of $10. Moreover, this is the point where significant buying interest was previously noted. This level could open the way for further declines if it doesn't hold. This could cause the DOT to fall to the $8.50 level. Conversely, the recent peak at $11.21 acts as a resistance level. A break above this level could refute the bearish thesis and set the stage for a retest of higher prices.

An exponential moving average (EMA) is a special variant of a moving average that prioritizes the most recent data points over older ones. Thus, it gives more weight and influence to the most recent market action. This method of calculation makes the EMA more responsive to recent price changes.
When an EMA that tracks short-term trends (e.g., a 9-day period) crosses an EMA designed to reflect medium-term trends (e.g., a 26-day period), the event is generally considered a bearish signal.

In the case of the DOT, the 9-hour EMA seems poised to cross below the 26-hour EMA. This is a classic red flag signaling that price may be in a downtrend in the medium term.