Polkadot price has bounced back in the past few days as the crypto market has improved. After bottoming at $3.24 earlier this month, the token has jumped by over 27% to the current $4.10. This article explores why technicals and fundamentals have aligned and why the coin may jump by double or triple digits in the coming months.
Polkadot price weekly analysis points to more gains
The weekly chart above highlights an important development, as the coin has failed to drop below the key support level at $3. It has remained above this level at least four times since 2023. Even when the world was ‘falling’ in the crypto market, it remained above that level.
That is a sign that DOT price has formed a quadruple bottom pattern, a highly popular bullish sign whose neckline is at $11.70. Therefore, there is a likelihood that the token will eventually bounce back in the coming weeks.
If this happens, the next Polkadot price to watch will be that neckline, which is about 190% above the current level. This view will become invalid if the coin drops below the key support of $3.2.
DOT price has formed a falling wedge on the daily chart
The daily chart paints a clearer bullish picture for the DOT price. As shown below, the coin has formed a giant double-bottom pattern, with its neckline at $11.65. This double-bottom level is approximately at $3.6.
At the same time, it has formed a giant falling wedge pattern, which consists of two converging trendlines that are falling. This pattern often leads to more upside when the two lines near their confluence level.
Additionally, the coin has formed a bullish divergence pattern. This pattern happens when oscillators like the Relative Strength Index (RSI) and the Stochastic Oscillator starts to go up when an asset is a downtrend.
DOT price has also moved slightly above the weak, stop & reverse point of the Murrey Math Lines tool. Therefore, the short-term outlook for the DOT price is where it keeps rising as bulls target the key resistance point at $6.67, which is the 38.2% retracement level.
Top catalysts for Polkadot
Polkadot has numerous catalysts that may push its price up sharply in the coming months. First, the token will benefit from the ongoing crypto market recovery now that Bitcoin has emerged as a safe haven asset. A strong Bitcoin rally to its record high will push its price much higher in the coming months.
Second, Polkadot’s network is evolving through the Polkadot 2.0 upgrade. This is a crucial three-step process designed to improve the network’s functionality permanently. For example, the agile coretime upgrade made it possible for developers to build applications without the need for the long process of parachain auctions.
Polkadot 2.0 also included asynchronous backing and elastic scaling. Async backing decouples parachain block production from the Relay Chain’s latest block, leading to faster speeds. The upcoming elastic scaling allows parachains to scale more effectively.
Further, there is a likelihood that the Securities and Exchange Commission (SEC) will approve a spot DOT ETF later this year. While its eventual inflows will be weak, the approval will be a positive thing as it will create hype around the network.
DOT price will also benefit from the upcoming Federal Reserve interest rate cuts now that the US economy is slowing. The International Monetary Fund (IMF) downgraded the US economic forecast for the year to 1.8%. That will be a big drop from the 2.45 growth rate in 2024.
Source: Invezz / Digpu NewsTex