- Polkadot price has jumped by more than 8% from the lowest level this year.
- The coin has formed an inverted head and shoulders pattern.
- Polkadot’s futures open interest has been a bit mild recently.
Polkadot price has bounced back in the past few days as investors bought the dip. DOT, the network’s token, rose to a high of $4.67 on Tuesday morning, the highest level since August 17th. It has soared by almost 10% from the lowest level this month, giving it a market cap of over $5.5 billion.
Polkadot ecosystem resurgence
Polkadot is a leading blockchain network that was started by Gavin Wood, a co-founder of Ethereum. Its goal is to let developers build scalable independent blockchains known as parachains. A parachain is a blockchain that developers can use to build their own dApps.
Each developer that moves to Polkadot must go through a parachain auction to secure their slots. And after doing that, they are required to renew them periodically. Some of the most notable Polkadot parachains are Astar Network, Litentry, Efinity, Moonbeam, and Phala Network.
Polkadot, like other blockchains, have struggled in the past few months as the crypto bear market continued. As a result, most of its parachains have struggled to gain traction among developers and cryptocurrencies. For example, Moonbeam has a DeFi TVL of just $58 million while Moonriver has just $9.1 million.
Read more: How to buy Polkadot.
At the same time, open interest of Polkadot in the futures market has been in a downward trend in the past few months. According to CoinGlass, the open interest stands at $141 million, down from the year-to-date high of over $200 million. It has remained relatively unchanged in the past few months.
Data shows that most of the open interest is in Binance followed by Bybit, OKX, and Bitget. Open interest is an important metric that shows the volume of unfilled contracts in the futures market. A higher number is seen as being positive for a cryptocurrency.
Polkadot price prediction
The four-hour chart shows that the DOT price has made a strong recovery in the past few days. Along the way, the token made a bullish breakout above the important resistance point at $4.56. This is an important level since it was the inverted head and shoulders pattern.
The Polkadot price has risen above the 25-period and 50-period moving averages, which is a bullish sign. Therefore, there is a likelihood that the token will continue rising as buyers target the key resistance point at $4.83, the lowest level on August 7th. The stop-loss of this trade will be at $4.45.
