Polkadot (DOT) is beginning to make waves in the Web3 ecosystem, bolstered by a recent upgrade that has captured the interest of developers and investors alike. While the cryptocurrency market has seen a downturn over the past few months, analysts are starting to notice signs that DOT may be nearing a turning point, especially as we approach the final quarter of 2024.
Despite facing price declines, there are emerging indicators that suggest DOT could be setting up for a bullish run. The weekly MACD (Moving Average Convergence Divergence) is revealing higher lows, and the moving averages are beginning to flatten. These technical signs often signal a potential recovery and upward momentum, particularly as the overall market stabilizes.
Recent price action for DOT/USDT reflects a resilience that may bode well for future performance. Notably, DOT has failed to breach the low it reached in October 2023, which was followed by a significant bull run peaking in March. The price has experienced a downward trend since then, but it has yet to break below the market crash low from August 5th. This stability suggests that accumulation may be occurring among investors, setting the stage for a possible upward movement.
One of the most compelling technical patterns forming is a potential double bottom at the $3.56 level. This pattern often indicates a reversal and could signal that DOT is poised for a rebound. Additionally, the Chaikin Money Flow (CMF) indicator reveals a divergence: while the CMF is on the rise, indicating increasing buying pressure, DOT's price has continued to decline. This discrepancy further supports the notion that bullish sentiment is building beneath the surface.
The sentiment among investors appears to be increasingly bullish. The percentage of long positions on DOT has surged to 73%, a figure that reflects the growing confidence of whales, retail investors, and institutional players who are accumulating DOT in anticipation of a price rise. Furthermore, the whale vs. retail delta stands at 46%, indicating a positive trend and underscoring that both retail and larger players are aligned in their expectations for DOT's future.
Polkadot’s price movements are intricately tied to liquidity zones, which can significantly influence its trajectory. Currently, DOT is navigating from areas of low liquidity to those with higher liquidity. This movement suggests that an upward trend is more likely, especially as liquidity zones above DOT's current price become more favorable. The next key target to watch is the $4.25 level, which has approximately $117,000 in liquidations waiting to be triggered. In contrast, the lower liquidity zone at $4.08 carries a larger liquidation volume of $189,700, reinforcing the likelihood of an upward movement.
With the current market dynamics and indicators in play, Polkadot appears to be on the cusp of a significant upward move. Investors and analysts alike are keeping a close eye on the developments as DOT prepares to leverage favorable liquidity conditions and a growing bullish sentiment. If these trends continue, DOT may well establish itself as a strong contender in the Web3 space as we move into the latter part of 2024.