After a significant price decline of over 50% since May 2024, Polkadot (DOT) is now poised for a notable upside rally. The potential reasons for this bullish speculation include recent price action, increased investor interest, and the current bullish market sentiment.
Polkadot (DOT) Technical Analysis and Upcoming Levels
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According to expert technical analysis, since May 2024, DOT has followed a lower high and lower low price action pattern while facing resistance from a descending trendline. However, with the recent price rally, DOT has broken out of this trendline, shifting the sentiment from a downtrend to an uptrend.
Source: Trading View
Based on recent price action and historical momentum, there is a strong possibility that DOT could surge by 75% to reach $7.65 in the coming days. However, DOT may encounter several resistance levels along the way: Resistance (R1) at $5.1, R2 at $5.6, R3 at $6.5, and R4 at $7.6.
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However, considering the current market sentiment, it appears that DOT could easily surpass this level in the coming days.
Despite this bullish outlook, DOT is currently trading below the 200-day Exponential Moving Average (EMA) on the daily timeframe, indicating a downtrend.
Bullish On-Chain Metrics and Current Price Momentum
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DOT is currently trading near $4.35 and has experienced a price jump of over 1.5% in the past 24 hours. During the same period, its trading volume dropped by 10%, indicating lower participation from traders and investors compared to the previous day.
Besides small price changes, on-chain metrics further support DOT’s positive outlook. According to on-chain analytics firm Coinglass, DOT’s long/short ratio currently stands at 1.07, indicating strong bullish sentiment among traders. Additionally, its open interest appears to be steadily rising, reflecting growing interest from community members.
Source: Coinglass
Based on the data, DOT’s open interest has increased by 2.9% over the past 24 hours and 1.67% in the past four hours.
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A combination of these on-chain metrics and technical analysis suggests that bulls are currently dominating the asset, which could support DOT in achieving a 75% rally in the coming days.
