- Polkadot (DOT) has flashed bullish technicals after a 20% drop in the last 30 days and looks poised to retest March highs this month.
- Smart investors are looking to take advantage of the discount prices ahead of an imminent price breakout, partly fueled by the coming Bitcoin halving.
Polkadot (DOT) has suffered a bearish trend for the last couple of weeks. Market data shows that DOT has recorded a 20% dip in the last 30 days. This trend is consistent with a majority of altcoins which have undergone a retracement driven by the volatility witnessed with Bitcoin (BTC). With investors caught between buying and selling, a few technical indicators offer key insights.
At the time of writing, DOT is trading for $8.31 after a 1.6% drop in the last 24 hours. The altcoin has this week staged a comeback, adding nearly 3%. The altcoin is trading in a tight range of $8.23 – $9.07 signifying indecisiveness among investors with neither bears nor bulls taking control.
With investors undecided, DOT has seemingly moved sideways, a move that is followed by a price breakout, either to the upside or downside.
Examining if Polkadot (DOT) could break above a recent pattern, on-chain data offers great insight. Analysis using Santiment’s data showed high open interest for DOT. In the cryptocurrency market, rising open interest often suggests the current price trend will continue, which in this case is negative for the price pattern.
Other bearish signs include DOT’s funding rate, which is typically inversely correlated with price. A high funding rate suggested a higher chance of DOT’s value dropping further. Additionally, the Relative Strength Index (RSI) was below neutral territory, another bearish indicator.
However, there were some signs of potential bullishness. Both the Chaikin Money Flow (CMF) and Money Flow Index (MFI) showed upward movement in recent days, suggesting an influx of money that could push the price higher.
Additionally, network activity has indicated renewed interest. Polkadot’s total number of active accounts in the ecosystem surpassed 605,000. This is a bullish sign that points to increased network usage and adoption. Playing a huge role in this is the network’s innovative projects. As CNF recently highlighted, some of the game applications and innovative projects connected to Polkadot as revealed on its official X account include the Ajuna Network, Astar Network, Moonbeam Network, playmythical, neurolanche, amongst others.
The inclusion of these projects and continued growth is important for Polkadot’s price movement as the new networks increase activity and drive demand, boosting Polkadot’s value for its investors.
The upcoming Bitcoin halving holds massive potential for a majority of altcoins with general optimism around this historically bullish event positively affecting the entire market. The next couple of days will be crucial for investors with smart investors continuing to take advantage of the dip ahead of a breakout.
Recommended for you:
Credit: Source link
