Despite the recent prolonged consolidation, bullish sentiment surrounding Polkadot (DOT) seems developing. Today, crypto analyst Ali Martinez shared data suggesting a potential uptrend for the altcoin.
Polkadot forms potential bullish breakout
DOT has formed a bull pennant pattern on its monthly chart, signaling a possible major upsurge movement. That is according to the latest technical analysis reported by Ali Martinez today. As a result, the altcoin is prepared for a bullish pennant breakout following a prolonged consolidation period seen in the past several weeks.
The current correction phase, which persisted for more than one month, has displayed chains of lower highs. However, this trend is set to come to an end. As indicated in Martinez’s technical chart, DOT’s price actions have been confined within converging trend lines, developing a clear pennant pattern.
This formation signals that Polkadot is gaining strength for the next major price rise. While this pattern is known for its bullish continuation signal, it typically suggests token acquisition before a massive price uptrend.
Martinez believes that a successful breakout from this pattern could push Polkadot to a massive high of $17, which represents a 169% increase from its current value.
DOT price analysis
Polkadot’s current price remains 69.8% below its highest level ($10.7) reached last year on December 7. Its price is currently trading at $6.30, down 2.3% over the previous day. Also, its trading volume is down 38.50% over yesterday, suggesting recently decreased participation from traders and investors.
Furthermore, its price has been down 11% in the past seven days and down 10% in the past 30 days, highlighting ongoing prolonged consolidation.
DOT has underperformed major crypto assets over previous months. Its market valuation currently stands at $9.68 billion, making it the 18th largest virtual currency in the entire digital asset ecosystem. Its underperformance is possibly due to its network being less powerful compared to other protocols like ETH and SOL.
Ethereum is recognized for its broad ecosystem, which hosts prominent dApps like Compound, Aave, and many others. On the other hand, Solana is known for its powerhouse as multiple meme coins and DEX networks like Orca, Raydium, and others run on top of its ecosystem.
The formation of the bull pennant pattern appears to be fueled by technical upgrades that Polkadot introduced recently. The Polkadot 2.0 initiative is an upgrade that seeks to scale the network for various applications. This includes revamping Polkadot’s asset hub to Solidity smart contracts and EVM.
This technical advancement also seeks to develop an elastic scaling solution to allow developers to flexibly adjust unified address format and network processing speed. The update will see DOT being used as a universal fee token in all parachians. These upgrades are anticipated to make Polkadot a preferred blockchain for developers in industries like DeFi and gaming. The incoming price uptrend is part of indicators that this upgrade initiative is beginning to deliver results.
