- Polkadot has surged over 9%, forming a bullish cup-and-handle pattern and reclaiming key support levels, with a potential breakout towards $5.
- Strong trading volume, rising long positions, and favorable macro liquidity trends suggest DOT could breach the $5 resistance soon.
Polkadot’s Bullish Momentum: Is $5 on the Horizon?
Polkadot (DOT) has been making waves in the crypto market, experiencing a significant 9% surge in a single day. After reclaiming key support levels, DOT is now gearing up for a potential breakout towards $5. Let’s dive into the technical factors and market dynamics that could make this possible.
Cup-and-Handle Formation: A Bullish Signal
Polkadot has formed a classic cup-and-handle pattern above its key demand zone, a technical setup that often signals a continuation of bullish trends. After breaking through the $3.75 mark and flipping the $3.85 level into solid support, DOT has risen to $4.11 at the time of writing, marking an impressive 9.21% increase. The market structure shift and growing technical strength point toward a potential move to the $5.00 resistance level.
Surging Volume and Aggressive Long Positions
The rise in DOT’s price is backed by strong derivatives data. Trading volume has surged by 45.85% to $494.41 million, while Open Interest jumped 12.89%, signaling fresh capital entering the market. This behavior suggests traders are betting on continued price growth, not short-term corrections. Moreover, liquidations have played a key role in fueling this rally. Over $354,000 in short positions were wiped out, triggering additional buying pressure.
Short Pressure Clears Path for $5
The latest price breakout coincided with a wave of short liquidations, with short sellers forced to exit, which accelerated DOT’s upward momentum. Binance’s liquidation map reveals significant short pressure between $3.75 and $4.10. DOT’s successful climb through this resistance zone has cleared the way for a smoother path toward $5.
Macro Liquidity Boosts the Bullish Narrative
The broader market environment also supports DOT’s rally. The M2 Global Liquidity Index has risen to 97.3, reflecting an increase in global capital flowing into risk assets. Historically, Polkadot has moved in sync with this liquidity index, suggesting favorable conditions for further growth.
$5 is Within Reach
Polkadot’s recent bullish move isn’t a fluke. With strong technical indicators, rising trading volumes, and favorable macro conditions, the path towards $5 now looks increasingly achievable. As long as buying interest remains steady and the market conditions continue to align, DOT could soon break through the psychological $5 barrier, further confirming its upward momentum.
