- Polkadot (DOT) has surged from below $3.75, flipping $3.85 into a strong support level and gaining 9.21% in a single day to trade at $4.11.
- A classic cup-and-handle pattern is forming, signaling a potential continuation of the bullish trend.
- Derivatives data shows aggressive long positioning, with trading volume up 45.85% to $494.41 million and Open Interest rising 12.89% to $376.11 million.
- Over $354.86K in short positions were liquidated, clearing resistance and paving the way for DOT to target the $5.00 level.
- Macro liquidity trends, including a rise in the M2 Global Liquidity Index to 97.3, are providing a supportive backdrop for DOT’s rally.
- The combination of technical strength, liquidation-driven momentum, and favorable macro conditions suggests further upside potential.
Polkadot’s Bullish Momentum: A Technical Perspective
Polkadot (DOT) has reignited its bullish momentum, breaking out from a key demand zone and flipping $3.85 into a solid support level. This move has been accompanied by a decisive shift in market structure, with DOT climbing 9.21% in a single day to trade at $4.11. The asset’s price action is carving out a classic cup-and-handle pattern, a bullish technical formation that often precedes further upward movement.
The significance of this pattern lies in its ability to signal trend continuation. The “cup” represents a period of consolidation and accumulation, while the “handle” reflects a brief pullback before a breakout. DOT’s ability to hold above its demand zone and form this structure suggests that the asset is gearing up for a sustained push higher. With the $5.00 resistance level now in sight, the technical setup appears increasingly favorable for bulls.
Derivatives Data: A Bullish Confirmation
The derivatives market is providing additional confirmation of DOT’s bullish momentum. Trading volume has surged by 45.85%, reaching $494.41 million, while Open Interest has climbed 12.89% to $376.11 million. These simultaneous increases in price, volume, and Open Interest indicate that fresh capital is entering the market, rather than traders simply taking profits. This behavior reflects growing confidence among market participants that DOT’s rally has more room to run.
Adding to this bullish narrative is the wave of short liquidations that accompanied DOT’s breakout. Over $354.86K in short positions were wiped out, compared to just $48.19K in long liquidations. This imbalance highlights how sellers were caught off guard, forced to exit their positions as DOT climbed through key resistance levels. Binance’s liquidation map further reveals a dense layer of short pressure between $3.75 and $4.10, which has now been cleared. With resistance levels broken and short pressure alleviated, the path toward $5.00 appears increasingly achievable.
Macro Liquidity Trends: A Broader Market Shift
Beyond the immediate price action, macroeconomic factors are also playing a crucial role in supporting DOT’s rally. The M2 Global Liquidity Index, a key measure of capital flow into risk assets, has climbed to 97.3. Historically, Polkadot has shown a strong correlation with this index, moving in tandem with broader liquidity trends. The current expansion in global liquidity provides a favorable backdrop for DOT to continue its upward trajectory.
This alignment between macro liquidity and DOT’s price action suggests that the asset’s rise is not an isolated event but part of a broader market shift. As capital flows into risk assets increase, cryptocurrencies like Polkadot stand to benefit from heightened investor interest. This external confirmation strengthens the case for further upside, as DOT’s rally is supported by both technical and macroeconomic factors.
Liquidation-Driven Momentum: Clearing the Path to $5.00
One of the most striking aspects of DOT’s recent breakout is the role of liquidations in accelerating its upward momentum. The wave of short liquidations, totaling $354.86K, not only cleared resistance but also fueled additional buying pressure. This phenomenon occurs when short sellers are forced to exit their positions, triggering stop-loss orders and creating a cascade of upward price movement.
The clearing of short pressure between $3.75 and $4.10 has left DOT with a less obstructed path toward the $5.00 resistance level. This psychological barrier now stands as the next critical target for bulls. If buying interest remains strong and volume continues to rise, DOT appears well-positioned to test—and potentially breach—this level in the near term.
Conclusion: Polkadot’s Path Forward
Polkadot’s recent breakout is a testament to the asset’s growing technical strength and the supportive macroeconomic environment. The formation of a cup-and-handle pattern, combined with rising trading volume and Open Interest, underscores the bullish sentiment surrounding DOT. The wave of short liquidations has further cleared resistance, paving the way for a potential move toward $5.00.
Macro liquidity trends, as reflected in the rising M2 Global Liquidity Index, provide an additional layer of support for DOT’s rally. This alignment between technical and macro factors suggests that Polkadot’s rise is not merely a short-term spike but part of a broader market shift. As traders continue to add long positions and short pressure diminishes, DOT’s bullish momentum appears poised to carry it to new heights. The $5.00 resistance level now stands as the next major milestone, and if current trends persist, Polkadot could soon achieve this target, solidifying its position as a leading asset in the cryptocurrency market.
Source:: Polkadot (DOT) has surged from below $3.75, flipping $3.85 into a strong support level