The cryptocurrency market continues to underperform, heading into the last two weeks of the year.
The cryptocurrency market has had an excellent 2021. However, the recent performance could see the broader market enter the new year in a bearish fashion. The prices of most cryptocurrencies are down by more than 20% over the past month.
Bitcoin is still struggling below the $50k level while Ether has lost the major support at the $4,000 mark. DOT, the native coin of the Polkadot ecosystem, is also underperforming, losing more than 3% of its value over the past 24 hours.
Polkadot remains one of the top 10 cryptocurrencies by market cap, occupying the tenth position just above the LUNA, the native coin of the Terra blockchain. At press time, DOT is trading just around $27 per coin, down by 5.5% over the past 24 hours.
If the market condition persists, then DOT risks losing more of its value over the coming hours and days.
Key levels to watch
The DOT/USD 4-hour chart is currently bearish as the broader market continues to underperform. The relative strength index (RSI) of 32 shows that DOT is currently oversold, a heavy bearish indicator.
Furthermore, the MACD line has dropped below the neutral zone, indicating that the bears are currently in control of the market. At press time, DOT is trading below its 100-day simple moving average of $32.
If the current market condition persists, then DOT will lose the first major support level at $25 and drop below it for the first time since September. In the event of an extended bearish performance, DOT could be forced to defend the second major support level at $22 before the end of the day.
However, if the market conditions change, then DOT could rally towards the first major resistance level at $30 over the next few hours. The second major resistance level at $36 should limit further upward movement in the short term.