• Polkadot’s descending wedge hinted at a bullish reversal, with traders eyeing a potential breakout.
• Whale accumulation and rising volume suggested that Polkadot was gearing up for a significant price movement.

Polkadot [DOT] was displaying potential upward momentum as technical indicators and market activity suggest a shift in sentiment.

DOT’s daily chart highlighted a descending wedge pattern, a bullish reversal structure typically indicating a possible breakout on the horizon. 

Formed by converging trend lines with lower highs and lower lows, this pattern suggests weakening bearish momentum. DOT traded near the wedge’s apex at press time, where a breakout may soon occur.

Key resistance and support levels

The key resistance level to watch was $4.50 at press time, which marked the upper boundary of the descending wedge.

A breakout above this level would confirm a bullish reversal and could drive the price toward the projected target near $10. 

This represented a potential gain of approximately 129.73% from current levels, highlighting the importance of this resistance zone.

The $3.911 support level is crucial for maintaining the bullish setup. Holding above this zone is essential; failure to sustain above it could invalidate the positive outlook and increase the risk of further downside pressure.

Traders are closely monitoring these levels as DOT approaches a critical decision point.

Traders reengage

Recent Coinglass data indicated heightened market activity, with trading volume surging by 29.77% to $241.40 million. Open Interest has also risen by 11.29%, reaching $206.04 million.

These increases suggested growing trader engagement and interest, often seen before major price movements. 

The rising volume and Open Interest reflected renewed focus on DOT, signaling that traders may be positioning for a potential breakout.

However, a broader look at DOT Futures Open Interest shows a decline from peaks of nearly $400 million in mid-April to current levels around $150-$200 million. 

This downward trend indicated reduced trader engagement and a cautious market sentiment amid DOT’s price decline.

Whales shift, market awaits move

The behavior of large holders has also been notable. Data showed that whales holding stablecoins worth over $5 million accumulated significantly from late April to mid-June 2024, particularly as DOT’s price fell.

This pattern suggested that whales were preparing to deploy capital during periods of lower prices. 

Read Polkadot’s [DOT] Price Prediction 2024–2025

However, recent declines in whale holdings indicated possible caution or profit-taking, highlighting the ongoing uncertainty in market direction.

Polkadot is at a critical juncture, with technical patterns, volume, and market activity suggesting that a significant move could be on the horizon.