DOT’s 16% weekly hike means altcoin can hold this level IF…

• Polkadot aims for a 101% rally to $12.61 but risks revisiting $4.15 if $8.60 support fails.
• Positive funding rates and bullish patterns signal optimism as DOT retests its critical $8.60 level.

Polkadot [DOT] has successfully closed above the critical $8.60 resistance on the weekly chart. This level has historically played a pivotal role in determining DOT’s price trajectory. 

According to analysis from Rekt Capital, DOT is now retesting $8.60 as support, a move that could determine its next direction.

In 2021, a similar retest of this level resulted in a rally to new all-time highs above $50. However, earlier in 2023, DOT failed to hold $8.60 as support, leading to a steep decline to its yearly low of $4.15. 

Historical precedent and price targets

The $8.60 level has proven to be a critical inflection point for Polkadot in the past. A successful retest at this level in 2021 led to exponential gains, with DOT reaching its all-time high. 

Conversely, the failed retest earlier this year caused significant losses, emphasizing the importance of this key zone.

Source: X

Should the retest succeed, DOT is expected to aim for the next major resistance at $12.61. From its current position, this marks a potential 101.53% gain, based on historical price behavior. 

However, if $8.60 fails to hold, traders could see the price revisit lower levels, including the $4.15 support.

Metrics show bullish momentum

Polkadot was trading at $8.86, at press time, reflecting a 4.40% increase in the last 24 hours and a 16.97% rise over the past seven days. 

Meanwhile, the 24-hour trading volume is $1.03 billion, with a circulating supply of 1.5 billion DOT, giving the cryptocurrency a market capitalization of $13.48 billion.

Data from Coinglass shows an 8.74% rise in Open Interest(OI) to $499.25 million, alongside a 22.03% increase in trading volume to $915.97 million. 

Additionally, the OI-Weighted Funding Rate for DOT has remained positive since mid-November, reflecting strong demand for long positions. 

Spikes in funding rates on the 12th and 18th of November indicate heightened bullish sentiment. This aligns with the ongoing breakout above $8.60.

Source: Coinglass

On-chain activity and technical patterns

On-chain metrics show mixed activity for Polkadot. According to DefiLlama, the Total Value Locked (TVL) in Polkadot stands at $55.89 million, with a 24-hour decrease of 27.44%. 

The network’s stablecoin market capitalization is $89.13 million. Despite the TVL decline, the positive funding rates and rising open interest suggest traders are positioning for further upside.

Read Polkadot [DOT] Price Prediction 2024-2025

Technically, Polkadot recently broke out of a bullish falling wedge pattern, which often precedes upward momentum. This breakout aligns with the move above $8.60, reinforcing optimism among traders. 

Market participants are now watching the monthly close, which could strengthen the breakout if it holds above $8.60.