Polkadot (CRYPTO:DOT) recently declined after encountering resistance at the 200-day moving average of $7.4, now testing the lower boundary of its sideways trading range at $6.

If this support fails, DOT could drop to $5.5.

On the 4-hour chart, DOT fluctuates within an ascending wedge, facing significant selling pressure at the $7.5 resistance level.

This suggests a continuation of the bearish trend unless demand strengthens.

Sentiment analysis shows high liquidation potential near $7.5 and $10, indicating prevalent short positions.

A bullish rebound might trigger a short-squeeze, rapidly increasing prices.