- DOT, at press time, was testing key resistance levels, underlining potential for bullish movement
- Rising social volume and liquidations pointed to greater market interest and volatility
Polkadot [DOT] has caught the attention of investors, as its inflation rate continued to decline to 7.78%. This reduction came on the back of a community-driven decision aimed at creating a more sustainable tokenomics model for the future.
At press time, DOT was trading at $5.12 following a 5.53% hike in the last 24 hours. Hence, the crypto’s price action has many asking – Is now the right time to invest in Polkadot?
DOT on the move – Is this the start of a bullish run?
Polkadot recorded an uptick of 5.53%, pushing the price closer to key resistance levels near $5.20. A successful breakthrough above this level could open the door for further price action towards $5.50.
However, if the price struggles to overcome resistance, a pullback towards support zones at $4.90 or $4.50 could occur. Traders should carefully watch for either a breakout or a retracement as this will dictate the next potential move for DOT.
Looking ahead, the price prediction for Polkadot remains optimistic, especially if the current bullish momentum holds. If DOT successfully breaks above $5.20 and stays above key support levels, we could see it test higher levels, potentially hitting $5.50 or beyond.
However, a failure to break resistance might cause a retracement to lower support levels such as $4.90 or $4.50.
Source: TradingView
Liquidations surge – What does it mean for the market?
Polkadot has seen a surge in total liquidations recently, signaling increased volatility in the market. Large liquidation volumes are a sign that traders are reacting swiftly to price movements.
While high liquidations indicate market participation, they also point to the potential for rapid market corrections. Investors need to be cautious, as sudden price movements could create both risks and opportunities for those entering or exiting positions.
Source: Coinglass
Will the technical indicators signal a breakout?
The Relative Strength Index (RSI) for DOT had a reading of 40.95, indicating that the market may be nearing neutral territory. A move above the 50-mark could signal high buying pressure and lead to a breakout.
Meanwhile, the Bollinger Bands have been tightening, suggesting that DOT could be on the brink of a significant price move.
If the price breaks above the upper Bollinger Band, a hike in buying activity could push DOT to higher levels. On the contrary, a drop below the lower band could hint at a period of consolidation or pullback.
Source: TradingView
Social volume skyrockets – What does it mean for DOT?
Polkadot’s social volume and social dominance have been rising steadily too, reflecting growing interest and engagement within the crypto community. As social volume increases, it often translates to higher market awareness and can drive more demand for the asset.
Rising social dominance further suggested that Polkadot has been gaining traction among investors, making it an attractive asset in the current market. Such an uptick in social activity may add fuel to the fire, propelling the price of DOT higher.
Source: Santiment
Is now the right time to buy?
With Polkadot’s price action showing promise, a declining inflation rate, and growing social interest, this could be the right time to consider buying.
Read Polkadot [DOT] Price Prediction 2024-2025
If DOT breaks through key resistance levels and continues its bullish momentum, it could see further price hikes towards $5.50 or more. However, volatility remains a factor, and careful monitoring will be needed.
