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Polkadot (DOT) is gaining traction, showing strong signals for a potential price surge amid a bullish market structure.
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Recent technical charts indicate a key bullish pattern that suggests positive momentum could be on the horizon.
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“Once the upper resistance level of $5.293 is breached, DOT could see significant upward movement,” according to COINOTAG’s analysis.
Polkadot (DOT) shows signs of a bullish breakout as technical indicators align for a potential price surge, preparing for another rally.
Brief drop before a rally
At press time, Polkadot [DOT] is trading within a bullish pattern known as an ascending triangle, formed with a converging support line connected to a horizontal resistance line.
This pattern typically leads to a major rally once the upper resistance level of $5.293 is breached. However, based on the prevailing market structure, DOT could see a brief drop to the support level of $5.085 before a major rally in the next few days.
Source: TradingView
This drop to the lower support level is part of DOT’s momentum-building phase ahead of a breakout. Once completed, the asset would likely rally by 27.14%, hitting $6.47, as indicated on the chart.
Accumulation is ongoing
According to the Bull Bear Power (BBP) indicator, which highlights which market segment—buyers or sellers—is in control, buyers are currently dominant.
This was evidenced by the histogram’s formation on the chart. When the histogram is green and above the zero line, it alludes to bullish dominance. Conversely, when it turns red and falls below zero, sellers are more active.
Press time data revealed that the BBP had a press time reading of 0.010 – A sign that buyers are still in control.
Source: TradingView
A closer look at the Accumulation/Distribution (A/D) metric revealed that it has remained flat, with a reading of 54.83 million. In cases like these, particularly with the A/D staying positive, ongoing buying activity among market participants is a sign of accumulation at a lower price.
The resultant effect would be a price rally once accumulation is complete.
Derivative traders are making long bets
Derivative traders are starting to place long bets, with both the funding rate and the Open Interest-weighted (OI-weighted) funding rate turning positive.
At the time of writing, the funding rate was 0.0050%, meaning buyers have been paying a premium to maintain their positions – A sign of high conviction in the asset.
Source: Coinglass
This bullish sentiment can be further confirmed by the OI-weighted funding rate, which has turned positive and has been trending higher. This metric provides a more accurate representation of market sentiment by incorporating Open Interest (OI) into the funding rate calculation.
When it turns positive, as seen with DOT at 0.0021%, it means that buyers are in control and the market could likely follow in that direction.
Conclusion
In summary, Polkadot (DOT) appears positioned for an upward price movement as technical indicators and market metrics align favorably. The combination of a solid bullish structure, ongoing accumulation, and growing confidence among derivative traders sets the stage for significant price action in the near term. As the market reacts to these dynamics, investors should watch closely for key price levels that could signal the next breakout.
