Polkadot (DOT) recently witnessed a nearly 10% surge in price, with trading volume spiking over 19%, according to CoinMarketCap. At the time of writing, DOT was trading at $5.07, inching closer to the pivotal $5.30 resistance level. This zone has emerged as a critical battleground, with bulls eyeing a potential breakout and bears aiming to pull prices back below $5.00.
Bullish Breakout Scenario
A successful close above $5.30 could set the stage for a rally toward the $8.00 resistance level, with the next target potentially extending to $11.67. However, failure to maintain a foothold above this key area could trigger a bearish reversal, pushing DOT back toward the $4.70 or even the $4.30 – $4.00 accumulation range.
Technical Indicators Flash Mixed Signals
Technical indicators are showing mixed signals. The MACD recently crossed above the signal line, accompanied by elevated histogram bars, indicating growing bullish momentum.
Additionally, the Liquidation Map highlights significant long leverage positions between $4.54 and $5.09, suggesting that traders remain optimistic about further gains. However, the concentration of long positions near $5.30 also raises the risk of a liquidation cascade if the price fails to maintain momentum.
On-Chain Activity Weakens
Despite the bullish technical setup, Polkadot’s on-chain activity paints a less encouraging picture. Active addresses have declined to 62.1K, signaling a potential dip in network engagement. This could undermine the sustainability of any breakout attempt, especially if trading volume fails to keep pace.
Also Read: Polkadot’s Bullish Breakout: Why DOT Could Rally to $10 Amid Kusama Upgrade
For traders, the $5.30 zone remains a decisive pivot point. A clean breakout above this level could ignite a rally to $5.50 – $5.75, driven by short liquidations and bullish momentum. Conversely, a rejection at $5.30 may lead to a pullback toward $5.09 or lower, with a deeper plunge potentially testing the $4.80 support. As the showdown at $5.30 begins, market participants will be closely monitoring volume, leverage positions, and on-chain metrics to gauge Polkadot’s next move.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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