Polkadot Rallies 12% as Bulls Eye $6.47 Breakout

Polkadot [DOT] has shown bullish momentum over the past week, rallying by 12.13% as buying activity increased. At the time of writing, DOT was trading at $5.13, with minimal losses over the last 24 hours. However, according to AMBCrypto's analysis, this price drop could be part of a larger movement needed for a significant rally, as the bullish structure has mostly remained intact.

At present, Polkadot [DOT] is trading within a bullish pattern known as an ascending triangle, formed by a converging support line and a horizontal resistance line. This pattern typically leads to a major rally once the upper resistance level of $5.293 is breached. However, based on the prevailing market structure, DOT could see a brief drop to the support level of $5.085 before a major rally in the next few days. This drop is part of DOT's momentum-building phase ahead of a breakout, which could result in a 27.14% rally to $6.47.

The Bull Bear Power (BBP) indicator shows that buyers are currently dominant, as evidenced by the histogram's formation. The Accumulation/Distribution (A/D) metric has remained flat, with a reading of 54.83 million, indicating ongoing buying activity among market participants and accumulation at a lower price. This could lead to a price rally once accumulation is complete.

Derivative traders are starting to place long bets, with both the funding rate and the Open Interest-weighted (OI-weighted) funding rate turning positive. The funding rate was 0.0050% at the time of writing, indicating high conviction in the asset. The OI-weighted funding rate has also turned positive and has been trending higher, further confirming the bullish sentiment and suggesting that the market could follow in that direction.