Polkadot [DOT] Has Reignited Bullish Momentum, Rising Sharply from Below $3.75 and Flipping the $3.85 Level Into Solid Support.

The asset is carving out a classic cup-and-handle pattern above its key demand zone, signaling a potential trend continuation.

Polkadot [DOT] has quickly gained bullish momentum as it rebounded sharply from the lower $3.75 zone and flipped the $3.85 level into a strong support.

Now, the asset is forming a classic cup-and-handle pattern as it attempts to break above the key $5.00 resistance, which also serves as the upper boundary of the long-term demand zone. This move is setting the stage for a potential continuation of the bullish trend. At the time of writing, DOT is trading at $4.11, showing a strong 9.21% daily increase.

This move follows a decisive shift in the market structure and is in line with increasing technical strength.

Thus, the angle will be to examine if DOT’s renewed structure, combined with rising volume and improving macro conditions, can sustain its push toward the $5.00 resistance.

Are bulls gaining control?

DOT’s derivatives data continues to display aggressive build-up of long positions. As seen in the data from Coinglass, trading volume surged by +45.85% to $494.41 million, while Open Interest jumped +12.89% to $376.11 million.

This simultaneous increase in both metrics, alongside the price appreciation, suggests that fresh capital is flowing into the market rather than traders booking profits.

This behavior indicates that traders are anticipating continuation rather than reacting to short-term spikes. Hence, the bullish sentiment observed in derivatives adds another layer of confirmation to DOT’s current technical setup.

Moreover, the latest price breakout coincided with a wave of short liquidations. As shared by Glassnode, over $354.86K in short positions were wiped out, compared to just $48.19K in longs.

This data shows that sellers were caught off guard and forced to exit, further fueling the upside momentum.

Furthermore, Binance’s liquidation map reveals a thick layer of short pressure between $3.75 and $4.10. DOT’s rapid climb through this zone triggered a cascade of stop losses and quickly cleared the way for further gains.

As a result, the path toward $5.00 appears less encumbered and more technically feasible, considering the technical selloffs that unfolded as price sliced through the last band of short positions.

Is macro momentum lifting DOT?

Beyond the immediate price action, macro-level liquidity trends are also aiding the bullish narrative. As seen in the chart, the M2 Global Liquidity Index has climbed to 97.3, showcasing a sustained increase in capital flowing into risk assets.

In the past, DOT has largely moved in tandem with this index. When liquidity shrinks, DOT tends to follow suit, and vice versa.

Hence, the current expansion of liquidity bodes well for DOT to continue its rally. Additionally, this external confirmation strengthens the argument that DOT’s rise is not in isolation but part of a broader shift in the market structure.

Polkadot [DOT]’s bullish breakout is no fluke. Technical momentum, liquidation-driven acceleration, and macro-level liquidity alignment are setting the stage for further upside.

As traders continue to build long positions and short pressure has largely been flushed out, the next critical level to watch will be $5.00. If buying interest can maintain its strength, then DOT seems poised to test—and potentially break—this key psychological barrier in the near term.