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Why Polkadot [DOT] is slated to dash for some more upside



Source: Pixabay

Last week we saw Polkadot’s native cryptocurrency DOT pull off its sharpest bullish pivot since July. It is thus unsurprising that analysts might expect or hope for another major rally especially after it recently retested its lower range.

Here’s AMBCrypto’s price prediction for DOT

But are DOT rally expectations still grounded in reality especially given the ongoing economic concerns? Perhaps a favorable demand shift might support DOT’s continued upside.

Polkadot recently announced the launch of nomination pools. But how does this affect DOT’s demand?

According to Polkadot’s official announcement, the nomination pools will allow DOT holders to stake and earn rewards. This incentive might encourage more demand for DOT. The cryptocurrency’s social dominance and social volume registered a sizable uptick on the same day of the announcement.

DOT metrics

Source: Santiment

The social metrics boost seems to have steered the market in favor of the bulls. We also observed a surge in DOT’s weighted sentiment to its highest weekly value. This suggests that investors’ interest is quickly flowing back and this might lead to more upside in the next few days.

DOT metrics

Source: Santiment

DOT’s market cap grew by over $186 million in the last 24 hours at press time as a result of the sentiment shift and liquidity flowing back into DOT. Well, this outcome suggests that there was a strong accumulation in the last two days.

DOT metrics

Source: Santiment

DOT price action

A quick look at DOT’s price action reveals another reason why the bulls are looking to come back so soon. The cryptocurrency just concluded a 17% rally after bouncing back from October lows during the end-of-October rally.

A bit of a sell-off often follows a sizable upside and DOT’s downside in the last three days reflects this expectation. However, the downside pulled back to the 50-day moving average which often acts as a pivot point.

DOT price action

Source: TradingView

In addition, the latest downside has triggered a retest of the 50% RSI level, another indicator that investors often use as a pivot zone.

The convergence of these indicators, plus the announcement about the nomination pools contribute to more probability of a pivot. While the odds of a bullish takeover remain high, it is important to note that, at press time, the market was experiencing pre-FOMC jitters which may have affected DOT’s potential upside.

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Michael is a full-time journalist at AMBCrypto. He has 5 years of experience in finance and forex and more than two years as a writer in the crypto and blockchain segments. Michael's writing at AMBCrypto is primarily focused on cryptocurrency market news and technical analysis. His interests include motorcycles and exotic cars.

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