- DOT increased by 3.7% in the last week.
- Market indicators indicated that Polkadot is enjoying a wave of strong positive sentiment.
Polkadot [DOT] has thrived under favorable market conditions throughout the past month, resulting in moderate price gains after reaching a local low of $3.8.
As of this writing, Polkadot was trading at $4.253, showing a 2.83% rise on the monthly charts and an extension of this bullish trend by 3.70% over the past week.
Nevertheless, DOT still remains significantly low compared to its recent peak of $6.477 and is approximately 92.27% below its all-time high of $55.
The recent gains have sparked discussions among analysts regarding the altcoin’s future. One noteworthy analyst is Toni Bitcoin, who has drawn parallels between DOT’s current trajectory and that of 2020.
Market Sentiment Insights
In his analysis, Toni suggested that Polkadot is currently reflecting the accumulation phase observed in October 2020.
Source: X
In context, during Polkadot’s accumulation phase that began in October 2020, the asset saw a parabolic rise.
Consequently, after this accumulation, DOT rallied impressively from $3.5 to $6.093.
A subsequent breakout from this level allowed DOT to soar to $42.361, culminating in its all-time high months later. This unprecedented rally amounted to an increase of 730.59%.
Insights from DOT Charts
If DOT were to replicate the patterns of 2020, it could witness a historical surge.
While Toni’s analysis suggests an optimistic outlook, it’s crucial to consider what other market indicators reveal.
Source: Coinglass
The Long/Short Ratio for Polkadot has remained above 1 in the past 24 hours, indicating that a majority of investors are opting for long positions, thus dominating the market.
Source: Santiment
This preference for long positions is reinforced by a robust DyDx exchange funding rate, indicating that longs are confident in the market and willing to compensate shorts during downturns to maintain their positions.
Source: Coinglass
Moreover, a positive OI-weighted funding rate bolsters our previous assessment regarding the high demand for long positions.
Source: Santiment
Lastly, Polkadot has recorded a steady increase in open interest across exchanges, rising from $47 million to $54.3 million as of this report. This high demand for long positions indicates that new entries are predominantly longs.
Read Polkadot’s [DOT] Price Prediction 2024-25
In conclusion, DOT is encountering positive market sentiment coupled with heightened investor favorability. If these trends persist, DOT will likely target the next crucial resistance level at $5.0. In a bullish scenario, a breakout beyond this level could propel the altcoin towards $6.4.
Thus, a predicted rally would indicate three months of accumulation, preceding a potential historical surge from January to February 2025.
