Polkadot (DOT) has recently formed a cup-and-handle pattern, reclaiming the $4.00 level with strong volume. This move comes as liquidations and rising global liquidity align to support a potential push towards $5.00. The asset has shown bullish momentum, rising sharply from below $3.75 and solidifying the $3.85 level as support. Currently trading at $4.11, DOT has seen a strong 9.21% daily increase, signaling a potential trend continuation. The renewed market structure, combined with increasing volume and improving macro conditions, suggests a sustained push towards the $5.00 resistance.
The derivatives data for DOT indicates aggressive long positioning, with trading volume surging by +45.85% to $494.41 million and Open Interest increasing by +12.89% to $376.11 million. These metrics, along with the price increase, suggest that fresh capital is entering the market rather than profit-taking, indicating traders are betting on continuation. Additionally, a wave of short liquidations, totaling over $354.86K compared to just $48.19K in longs, shows that sellers were caught off guard and forced to exit, fueling further upside. The path towards $5.00 now appears clearer and more achievable.
Macro liquidity trends are also supporting DOT’s bullish narrative, with the M2 Global Liquidity Index climbing to 97.3, indicating increased capital flow into risk assets. Historically, DOT has moved in tandem with this index, suggesting favorable conditions for further rallying. This external confirmation strengthens the argument that DOT’s rise is part of a broader market shift. Overall, the technical momentum, liquidation-driven acceleration, and macro liquidity alignment point to further upside for Polkadot.
In conclusion, Polkadot’s recent bullish breakout is supported by technical momentum, liquidation-driven acceleration, and macro liquidity alignment. With traders continuing to add long positions and short pressure being flushed out, the $5.00 resistance level now stands as the next critical hurdle to watch. If buying interest remains steady, DOT appears poised to test and potentially breach this key psychological barrier in the near future. Keep an eye on Polkadot as it continues to make strides towards new highs in the market.
