Despite a 6.13% drop in the past 24 hours, Polkadot [DOT] has shown signs of resilience, sparking curiosity about its future trajectory. Recent data emerging from the market hints at a potential rebound following this temporary setback.
Potential for Price Surge to Reach $4.9
Polkadot’s shift from a smaller ascending triangle pattern to a larger one, marked by a horizontal upper resistance line and an upward-trending lower support line, indicates a phase of price consolidation that could precede a breakout.
At the current juncture, Polkadot has bounced off the lower support line, a move historically associated with triggering upward price momentum. This development sets the stage for DOT to target the $4.995 resistance level.
If buying pressure manages to overpower selling at this resistance level, Polkadot could potentially surge towards the $6.328 threshold. Conversely, a failure to sustain this bullish momentum might lead to a decline back to its 2024 low of $3.590, with the possibility of slipping even further to $3.562 if market conditions worsen.
Positive Indicators Point to an Upward Trajectory for DOT
An analysis by CryptoCrypto paints a favorable picture for DOT’s near-term performance.
The Open Interest Weighted Funding Rate (OI) on Coinglass, a crucial gauge of short-term market sentiment, has been climbing, indicating a bullish outlook for Polkadot.
This metric evaluates market dynamics by examining trading volumes and the positioning of traders, currently aligning towards a bullish scenario for DOT.
Additionally, the funding rate, integral for maintaining parity between futures prices and spot prices, remains in the positive territory at 0.0024%.
While a positive rate typically results in long position holders paying shorts to prevent excessive bullish positions, it also reveals the prevailing bullish sentiment in the market.
Bullish Trend Reinforced by Bollinger Band Analysis
Analysis utilizing the Bollinger Band (BB) indicates that Polkadot is poised for a potential rally.
The Bollinger Band, a vital tool for technical analysis that gauges market volatility and price levels, consists of a middle band (a moving average) flanked by two outer bands positioned two standard deviations away.
Recent activity has shown DOT’s price touching the lower Bollinger Band, hinting at potential oversold conditions and hinting towards a potential rebound.
This occurrence coincides with the support level of an established ascending triangle pattern, further reinforcing the probability of a bullish trend in Polkadot’s price.