According to CryptoPotato, Polkadot has recently seen a surge in demand, leading to a price increase that has surpassed its previous swing high and broken through a multi-month descending trendline. The price is now nearing the upper boundary of its consolidation range and is on the verge of exceeding it. A detailed analysis of Polkadot’s daily chart shows that after a long phase of sideways consolidation, a renewed spike in demand has pushed the price higher. This surge has enabled Polkadot to break through several key resistance levels, including a descending multi-month trendline, the prior swing high of $7.47, and the 200-day moving average.
Now, the price is nearing the upper boundary of this long-standing range and is on the brink of breaking above it. If the buyers manage to push above this range, it could signal the start of a sustained bullish trend. However, if selling pressure increases, a bearish reversal towards the lower boundary is possible. The price action around this crucial resistance zone will determine Polkadot’s short-term trajectory.
In the 4-hour timeframe, Polkadot’s recent bullish momentum is more evident, with the price experiencing a 12% impulsive spike towards a significant resistance area. This critical range is bounded by the 0.5 ($7.415) and the 0.618 ($7.821) Fibonacci levels. However, the price has been fluctuating within an ascending wedge pattern for an extended period, and following the recent surge in demand, it is now slightly retracing towards its upper boundary. If the buyers can breach the substantial resistance at $7.8, the next target will be the upper boundary of the wedge in the mid-term. Conversely, a bearish reversal could lead to another downward move, aiming for the wedge’s lower boundary. A decisive breakout from the wedge pattern is necessary to determine Polkadot’s upcoming direction.
Polkadot’s price has recently experienced a significant surge, raising expectations of a potential mid-term bullish trend. Therefore, analyzing the futures market sentiment is crucial to assess whether this uptrend will continue, as futures market positions are significant drivers of volatility. Despite the recent bullish surge, both open interest and funding rates have not shown a significant increase and remain near their lowest levels. This suggests that the recent price action was not driven by increased bullish activity in the perpetual markets. If open interest and funding rates begin to rise, it will signal strong bullish momentum, potentially solidifying the uptrend. Conversely, if these metrics remain low, the uptrend may lack the necessary support for long-term continuation. Traders should closely monitor these indicators to better understand the market’s direction in the coming weeks.
