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Bullish momentum or correction: what to expect from Polkadot (DOT)

Despite the impressive surge from $6.4 to $7.3, the upward trend of Polkadot (DOT) still cannot be considered stable.

We delve into on-chain metrics and technical indicators to anticipate the altcoin's dynamics in the near future.

How to buy Polkadot (DOT): a review of popular options.

Polkadot's technical indicators hint at a reversal

The Ichimoku Cloud is a technical analysis tool consisting of several indicators. It provides insight into potential support and resistance zones and is used to forecast future trends.

On the chart below, it is evident that DOT has broken above the 4-hour Ichimoku Cloud. A return to it may signal a trend reversal. On the daily timeframe, the altcoin's price is approaching the lower boundary of the cloud.


Meanwhile, on-chain data reveals concerning trends. The number of new Polkadot addresses has significantly declined, hinting at a loss of investor interest in the asset.

A sustained decrease in the number of new addresses could impact the overall state and expansion of the ecosystem. In the context of Polkadot, this decline may signify several things:

  • Decreased activity among existing users due to a lack of interesting projects, updates, or incentives to maintain engagement.

  • Growing bearish sentiments across the broader market.

  • Challenges in maintaining the project's unique value proposition compared to other solutions.

The chart illustrates the 7-day moving average (7DMA) of daily transactions on the network. After reaching a peak in January 2024, the number of transactions has steadily declined.

A decrease in activity often correlates with reduced overall network usage and, consequently, decreased demand for the native token.

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