Exploring Polkadot’s Future Trajectory: Is DOT Emulating Fantom’s Path?
Following a prolonged period of decline, Polkadot [DOT] has mounted a significant recovery in the past week. After bottoming out at $3.9, DOT has witnessed a robust uptick, surging by 12.82%.
Moreover, the altcoin has crossed above the Simple Moving Average (SMA) on daily charts, signaling a potent upward momentum.
At the time of composing this analysis, DOT was exchanging hands at $4.37, denoting a 3.63% uptick over the past day, with an additional 6.36% increment evident on weekly charts.
Prior to this recent upswing, DOT had been on a downward trajectory, experiencing a 2.12% decline on a monthly timeframe.
However, the markets have exhibited resilience over the past day with a surge in demand for the altcoin. Consequently, DOT’s trading volume has spiked by 12.30% to $133.93 million, accompanied by a 3.78% expansion in its market capitalization.
These prevailing market conditions have reignited optimism within the cryptocurrency community. Notably, esteemed crypto analyst Ali Martinez has suggested that Polkadot is poised for a rally, drawing parallels to Fantom’s historical pattern.
Evaluating Market Sentiment
In his assessment, Martinez proposed that DOT might be mirroring Fantom’s trajectory.
According to his analysis, should the current pattern persist, DOT could surge to $9.7, retrace to $6.7, and ultimately achieve a yearly high of $20.
By way of comparison, Fantom experienced an extraordinary surge based on this pattern, soaring by 192.31% from a local low of $0.26 to $0.76.
Hence, applying this analogy, DOT could potentially surge by 357.67% assuming the pattern remains consistent.
Deciphering DOT’s Chart Signals
As per Martinez’s observations, Polkadot is currently basking in favorable market sentiment that could pave the way for a significant surge in the altcoin’s value.
For instance, Polkadot’s Open Interest per exchange in USD has witnessed a sustained uptrend over the past week, climbing from $46 million to $54.46 million at present.
This uptick suggests that investors are optimistic, with a willingness to establish new positions while maintaining existing ones.
In addition, Polkadot’s Funding Rate on the DyDx exchange has retained a positive stance throughout the past week, indicating an inclination towards long positions over short ones.
Such a trend implies that investors foresee an imminent price hike in the near future.
Furthermore, the demand for long positions is further substantiated by a reduction in liquidations for long positions. Over the previous two weeks, liquidations for longs have dwindled from $2.1 million to $2.36k currently.
This downward trend suggests that long position holders are willing to compensate short position holders during market downturns to maintain their positions.
Future Prospects for Polkadot
Undoubtedly, DOT is on a robust uptrend. With favorable market sentiment, the altcoin could potentially witness additional gains. Notably, the altcoin has encountered multiple resistance levels at $5.0.
A breakthrough beyond this threshold could propel the altcoin towards $6.5 in the short term. In an extremely bullish scenario, Polkadot may reclaim its highs from June at $7.3.