Polkadot (DOT) Primed for a Breakout as Indicators Flash Green

Polkadot [DOT] became the first gainer among the top 20 cryptocurrencies in the market. At the time of writing, DOT was trading at $6.24, which represents a 5.18% increase in the past 24 hours.

In a surprising turn of events, Polkadot [DOT] became the first gainer among the top 20 cryptocurrencies in the market. At press time, DOT was trading at $6.24, showing a 5.18% increase in the past 24 hours.

However, the uptrend might not be stopping anytime soon. This was according to the indicators revealed by the liquidation heatmap. In simpler terms, the liquidation heatmap predicts price levels at which large-scale liquidations might occur.

DOT set to climb out of the woods

A liquidation is triggered when an exchange closes a trader’s position due to high price volatility. This also occurs when a trader does not have the funds to keep the position open.

Having said that, the heatmap also showcases areas of high liquidity, indicating price levels that cryptocurrencies might move into. For Polkadot, AMBCrypto observed high liquidity ranging from $6.45 to $6.96.

Given this data, if buying pressure builds, DOT’s price could add to its recent gains. In such a scenario, the token might hit the $7-mark or trade above it.

Is a breakout incoming?

Another indicator that supported the hike was the weighted sentiment. A broader measure of social volume, weighted sentiment gauges the larger market’s perception toward a project.

For instance, if there are more positive comments online than negative ones, the reading will be positive. But a high volume of negative comments will push the reading to the negative side.

At press time, Polkadot’s weighted sentiment, which was previously -0.143, shifted to 0.307. This reading signaled growing confidence in DOT’s potential.

If this continues, it could lead to an increase in demand for the token. In turn, DOT’s price might return to the $7-zone within days at the time of writing.

Like sentiment, open interest (OI) aided the price hike. Open interest is the total amount of open contracts in the derivatives market. When it increases, it suggests that traders are adding to their net positions.

However, a decline in it indicates that traders are pulling out their funds and closing their positions. At press time, Polkadot’s open interest had risen to 133.35 million.

If this increment continues, it could pave the way for another price surge that might push DOT to $7.

Moreover, several analysts on X shared a similar outlook for DOT’s continuing price hike, with one being Captain Vibek.

Polkadot (DOT) Price Prediction 2024-2025 according to Vipek’s analysis

According to Vibek, DOT was on the verge of a major breakout. In his post on X, the analyst shared his thesis on the chart, where he specifically wrote,

“DOT has bounced nicely and about to break the wedge, watch that closely.”