Polkadot [DOT] has attracted significant interest from investors after a notable 88.09% surge in trading volume and a modest 0.45% price uptick.
At present, Polkadot is valued at $5.31 post its breakout from a descending wedge pattern.
Despite the active trading, DOT bulls need to maintain the upward momentum to validate the breakout and aim for the crucial $10.31 level.
Breakout from Descending Wedge: Will Bulls Dominate?
DOT has been contained within a bullish descending wedge pattern following a recent brief uptrend.
Upon analyzing the daily chart, the altcoin has exhibited bullish movement by surpassing the key $5.0 resistance level along its upper descending trend line.
To reach the significant $9.07 resistance, DOT must continue its bullish drive. Success beyond this point could propel Polkadot towards the psychological level of $10.31.
If the falling wedge breakout is not sustained, a potential retest of the $5.0 support level and lower could be in play.
Based on Cryptowaves data, the 24-hour RSI for Polkadot is at 45.64, escalating to 56.81 in the 4-hour timeframe, indicating heightened buying pressure amid increased trading activity.
Short-term moving averages data from TradingView (10-20 EMA/SMA) indicates a bullish trend, while the mid-term and long-term MAs lean bearish, signaling impending resistance.
The 24-hour Long/Short Ratio of 2.64 confirms positive short-term sentiment among bullish investors.
Insights from On-Chain Metrics
According to Coinalyze, DOT’s 24-hour Open Interest has decreased by 6.7% at the time of writing.
Per DefiLlama data, Defi transactions within Polkadot’s ecosystem predominantly favor parachains over the native chain.
In the later part of 2024 through 2025, Polkadot’s active addresses have shown moderate growth compared to previous periods, albeit a gradual decline is noted for the current month.
What Lies Ahead?
The future of Polkadot hinges on the overall growth of its ecosystem. DOT, the native token, will need sustained buying pressure to uphold its position above the bullish descending wedge pattern in the forthcoming weeks.
Investors might consider short-term gains on DOT while also diversifying investments across its parachains for long-term involvement in the ecosystem.