The Sharpe ratio, which evaluates the return on an asset relative to risk, plays an important role for investors. High values indicate good performance, while low values indicate potential losses. At the moment, the DOT coefficient is -4.32, which indicates a low interest of traders and investors in this asset.
Technical indicators are also not encouraging. The relative strength index (RSI) tried to cross the threshold value of 50, which may indicate a trend change, however, it quickly returned to the bearish mood zone.
Although the price of Polkadot has not yet reached the oversold level, unsuccessful attempts to stay above the 50 mark may indicate a possible decline in the future.
DOT price forecast: support at $7 is likely not to last
At the moment, Polkadot is trading within a descending parallel channel, trying to gain a foothold above the $7 level as support.
However, given the above indicators, it is likely that the asset will fail and reach the lower limit of the channel at $5.
However, a successful recovery from the $7 level may change the current situation. In this case, Polkadot will test the nearest resistance levels at $8 and $9.
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