DOT's Price Skyrockets 9% Backed by Bullish Cup-and-Handle Scheme; Will DOT Reach $5?
Rewritten Article:
Polkadot's Renewed Rally: Leading the Pack Towards $5.00?
After a calm spell, Polkadot (DOT) is back in the spotlight, prompting a 9% daily surge, propelling the price past $4.00. This energetic move isn't just a fluke; it's a clear shift in sentiment, driven by a classic technical pattern - the cup-and-handle formation - and improving macroeconomic factors. With the cup-and-handle setup and a well-positioned rally, DOT might be gearing up to test the next psychological barrier, $5.00.
Is Polkadot Charging Toward a Breakout?
The DOT chart paints an optimistic picture. After bouncing off support at $3.75, DOT's leaping price increase has retaken the $3.85 level with gusto, and now trades above $4.10. This asset displays a well-defined cup-and-handle configuration during the daily timeframe, causing excitement among technical analysts as it often indicates an upcoming breakout. Additionally, the accompanying volume surge suggests that this bullish Polkadot price surge isn't just speculative; it's a rally built on real market demand.
Chart 1- DOT/USDT Live Price, published on TradingView, April 23, 2025.
Bullish Signs in Derivatives Markets
The derivatives market provides another layer of insight. Open Interest has swollen by 12.89%, and trading volume has skyrocketed over 45% to reach $494 million. Such high increases in Open Interest and trade volume indicate that fresh money is flowing into the market, signaling confidence in continued gains rather than short-term profit-taking. This influx of new capital suggests that the Polkadot bullish breakout isn't merely a result of speculation but of genuine investor conviction. Traders seem to be positioning themselves for continued growth, not exit, making this bull phase appear sustainable.
Short Squeeze Fueling the Rally
A wave of liquidations has also aided DOT in clearing significant resistance levels. Over $350K in short positions were liquidated, compared to under $50K in long liquidations. This mismatch between short and long liquidations triggered a Polkadot bullish breakout, leading to losses being stopped and setting off a powerful upward push as shorts were forced to cover their positions. The liquidation map from Binance shows a thick zone of short pressure between $3.75 and $4.10. With DOT live price now beyond this range, the path forward appears clearer. The next resistance zone lies at $5.00, and the market structure suggests that it may not be as out of reach as it seemed just a few days ago.
Chart 2- DOT/USDT Live Price, published on TradingView, April 23, 2025.
Advantageous Macroeconomic Conditions
Polkadot is also receiving a boost from favorable macroeconomic factors. The M2 Global Liquidity Index has climbed to 97.3, indicating increased global capital availability. Historically, DOT has shown an affinity for liquidity cycles, making this an encouraging sign. With greater liquidity, risk assets often experience more aggressive buying activity, and Polkadot seems to be benefiting from this trend. By aligning with these market dynamics, the Polkadot price surge gains further credibility.
The Next Move for DOT
All signs suggest that DOT is in a strong position. Technical indicators like the cup-and-handle pattern, rising trading activity, and a reduced resistance from shorts, plus supportive macroeconomic factors, make the current Polkadot price surge more than just a short-term blip. The ongoing DOT price increase could test the $5 resistance if bullish momentum persists. By keeping an eye on volume and Open Interest to assess trend strength, as well as monitoring liquidation pressure to ensure it continues to thin out, market watchers can keep up with the dynamic Polkadot market.
Chasing the $5.00 Target
The Polkadot bullish chart setup seems to be driven by a combination of technical strength and supportive market conditions. With increased trading activity, reduced resistance from shorts, and macro liquidity on the rise, the asset appears to be well-positioned to sustain its upward trend. As the Polkadot price surge continues, $5.00 could prove to be a realistic near-term target, given that bullish momentum holds strong and market sentiment remains favorable.
Enrichment Data:
Key Drivers
- Market Sentiment: The renewed bullish enthusiasm following weeks of consolidation is aided by improved macroeconomic conditions, leading to bullish crypto trading[1][5].
- Technical Target: The successful breakout from the cup-and-handle pattern could catapult DOT toward $5.00. Some analysts project a $3.68-$5.52 range for 2025[4].
- Price Support and Resistance: The DOT price surges and support levels at $3.85 and $4.10 indicate strong buyer commitment at higher price points[1][5].
- Liquidation and Volume: The recent wave of liquidations and increased trading volume support the idea that this bullish phase is not driven solely by speculation but by genuine investor conviction[3].
- MACD and RSI: The Moving Average Convergence Divergence (MACD) line crosses above the Signal line, suggesting a strengthening uptrend, while the Relative Strength Index (RSI) oscillates near the overbought territory[2].
These factors suggest that $5.00 is a viable near-term target for DOT, given continued bullish momentum. The current technical setup and volume-backed rally make the Polkadot bull case appears strong.
- The cup-and-handle configuration on the Polkadot chart might signal an imminent breakout, potentially pushing the price towards the psychological barrier of $5.00.
- The keen interest in Polkadot derivatives markets, marked by a sharp increase in Open Interest and trading volume, signifies growing confidence among investors in the market's continued gains.
- The wave of liquidations in Polkadot trading, with over $350K in short positions liquidated compared to under $50K in long liquidations, has further propelled the bullish price surge.
- Advantageous macroeconomic conditions, such as the increased global liquidity indicated by the M2 Global Liquidity Index, have been favorable toward Polkadot's price surge, aligning with the market's aggressive buying activity.
- With strong technical indicators, trading activity, decreased short-term resistance, and supportive macroeconomic factors, the Polkadot price surge shows signs of sustaining its upward trend, possibly making $5.00 a realistic near-term target as long as bullish momentum holds and market sentiment remains favorable.
