Polkadot [DOT] appears to be slowly building momentum in the Web3 sector, following a recent upgrade that has garnered considerable interest from developers.
Similar to other digital currencies, DOT has experienced declines in recent months. Nonetheless, there are optimistic signs of a potential bottom forming, raising hopes for the last quarter of 2024.
The weekly MACD is indicating higher lows, and the moving averages are leveling off, suggesting that DOT might be gearing up for a bullish surge as the market steadies and rebounds.
The price action of Polkadot reinforces this perspective. DOT/USDT has displayed resilience by not dropping below the low it hit in October 2023, which preceded a bull rally that peaked in March.
Since then, the price has been on a downward trend. The low from the market crash on August 5th remains unbroken, indicating that accumulation is underway.
A potential double bottom at $3.56 may signify a forthcoming reversal. A review of the Chaikin Money Flow (CMF) indicator in conjunction with DOT’s price reveals a divergence: while CMF is on the rise, DOT’s price has been declining.
This divergence points to accumulation and hints that buying pressure could soon push the price higher.
Analysts at CryptoCrypto anticipate that DOT might need to retest the $3.56 level before making a definitive move to the upside.
Increasing Long Positions for DOT…
Moreover, the proportion of long positions on the Polkadot token is surging, currently at 73%.
This elevated percentage indicates a growing bullish sentiment among whales, individual investors, and institutions, who are likely amassing DOT in anticipation of a price surge.
The whale vs. retail delta, presently at 46%, also indicates a bullish trend, with only a minor dip today, reinforcing the positive outlook for DOT.
Favorable Liquidity Dynamics
The movement of Polkadot’s price is largely influenced by liquidity zones. DOT typically transitions from regions of low liquidity to those with higher liquidity.
Currently, the liquidity zones hinting at higher prices are in close proximity to DOT’s present price movement. This suggests that DOT is more inclined to move upwards, with the $4.25 level as the next significant target, holding $117,000 in liquidations.
In contrast, the lower liquidity zone at $4.08 has $189,700 in liquidations, making an upward shift the more likely scenario.
DOT has already absorbed liquidity below its current price, positioning it to target higher liquidity zones above, potentially propelling its price up.
Investors are observing closely as Polkadot gets ready for what could be a notable upward shift in the coming days.