Polkadot Price Action: Can DOT Break Free from Its Bearish Trend?
Polkadot Price Update – Polkadot’s native cryptocurrency DOT has been struggling to break free from a bearish trend that started in December 2024. Despite this, Polkadot has managed to find support at the $6 price level, while being constrained by a descending resistance line. This price action has led to a wedge pattern that DOT has been trading within for the past 7 weeks.
Failed Breakout and Weekend Pullback
Last week, DOT attempted to break out from this downward trend, spiking briefly mid-week. This raised hopes of potential upside, but the breakout was short-lived. In the last two days, DOT pulled back by approximately 12%, dropping back to around $6.61. The lack of strong demand to support a sustained rally was evident, as the weekend saw further price corrections. This indicates that a significant bullish rally may require more investor participation.
Renewed Market Excitement and Rising Address Activity
However, despite recent challenges, market dynamics are starting to shift. In the past 48 hours, altcoin excitement has returned, with some coins seeing positive liquidity flows. DOT’s price dip may have even presented a buying opportunity, as traders and investors show renewed interest.
Increased Address Activity and Open Interest
Activity on DOT’s network has notably increased. The number of active addresses rose from 5,154 on January 11 to 8,038 on January 17, signaling that traders are anticipating a bounce-back from the $6 support level. New addresses also surged, from 1,459 to 2,069 in just two days, reflecting growing confidence in the asset’s potential rebound. Moreover, DOT’s Open Interest grew from $439 million on January 14 to $524 million on January 18, showing that traders are starting to pay attention again.
Short-Term Profit Taking and Liquidation Data
Despite these positive signs, spot outflows of over $10 million in the last two days suggest that short-term profit-taking remains a focus for many traders. Liquidation data revealed that around $3 million worth of long liquidations occurred, indicating that there was not much leverage being used, which could contribute to accumulation over time.
Is DOT Primed for Another Rally?
According to AMBCrypto’s analysis, the increasing address activity and open interest data for DOT create potential for another price surge. However, market sentiment must remain strong and investor interest must continue, otherwise, a rise in DOT may be difficult.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrencies and stocks, particularly in micro-cap companies, are subject to significant volatility and risk. Please conduct thorough research before making any investment decisions.
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