Polkadot’s $DOT Eyes $4.68 After Liquidity Sweep and Key Upgrade

Key Insights:

• Polkadot’s liquidity trap at $3.31 could trigger a short dip before aiming for $4.68.
• $DOT’s breakout in July signals a potential long-term uptrend, driven by rising volume.
• Funding rates for $DOT remain cautious, hinting at a balanced market awaiting the next move.

Polkadot’s $DOT has recently been showing signs of potential growth. As Polkadot continues to evolve, its performance will be shaped by both technical factors and fundamental developments.

As of press time, Polkadot’s $DOT was trading at $3.61, with a 24-hour trading volume of $207,053,189. Despite a recent 2.49% decline in the past 24 hours, the market remains active, with attention focused on key price levels and the upcoming protocol upgrade.

Liquidity Trap and Potential Sweep

According to BitcoinSensus, Liquidity stacking around $3.31 could trigger a sweep before a move to $4.68. $DOT has been trading near an ascending trendline, currently hovering around the $3.59 level. However, there is growing speculation that a liquidity trap may occur just below this point.

This suggests that there could be a short-term price dip before a potential rise to the next resistance level. With $DOT’s current trading activity showing some stabilization, the market is likely awaiting further price developments before making any significant decisions.

Polkadot’s Breakout and Rising Volume

Notably, in early July, $DOT broke free from a two-year downtrend, reclaiming key support levels around $3.40 to $3.45. This breakout was accompanied by rising volume, indicating a possible shift in market sentiment. 

As Isaac Bassey pointed out, this could signal the start of a sustained uptrend for $DOT. The breakout, paired with the upcoming JAM protocol upgrade, sets the stage for long-term growth.

The JAM protocol upgrade will transform Polkadot’s core infrastructure into a decentralized supercomputer environment. This upgrade is expected to bring long-term benefits to the network, adding more utility to the platform and potentially driving increased demand for $DOT.

Market Sentiment and Funding Rates

The overall market sentiment surrounding $DOT has been fluctuating. As per Coinglass, the OI-Weighted Funding Rate for Polkadot has shown notable changes in recent months. After peaking in mid-June, the rate began to decline as $DOT’s price moved between $3.50 and $4.50. 

This shift in funding rates mirrors the highs and lows in $DOT’s price, with a stronger bullish sentiment often followed by price corrections. The funding rate remains at modest levels, suggesting a more cautious market sentiment.

However, the price of $DOT continues to stabilize around the $3.60 mark. Traders are carefully observing these developments, as the funding rate can provide additional insight into future price trends.