- DOT’s Open Interest and volatility dropped, suggesting a lack of demand for the token.
The liquidation heatmap showed that DOT’s price might drop to $5.90.
As a researcher with some experience in crypto market analysis, I’ve been keeping an eye on Polkadot (DOT) lately. Based on recent data, DOT’s open interest and volatility have dropped significantly, which could suggest a lack of demand for the token. The liquidation heatmap also indicates that DOT’s price might drop to around $5.90 in the short term.
As a researcher studying the cryptocurrency market, I’ve noticed that Polkadot [DOT] has been trading within a narrow range between $6.10 and $6.25 since June 14th. However, based on current trends and analysis, it seems unlikely that this sideways movement will persist indefinitely.
At DOT‘s market, AMBCrypto noted that its price experiences frequent fluctuations, a common characteristic referred to as volatility in the cryptocurrency world.
As an analyst, I would express it this way: The token’s price is prone to significant fluctuations, reaching great heights or depths in a brief time frame.
From my research perspective, the diminished volatility implies that Polkadot’s price may continue to move within a narrow range. According to Santiment’s data, the cryptocurrency’s one-day volatility reached its lowest point since May 18th.
DOT set to keep swinging around the same region
With a reading of 0.0026, it’s possible that the metric may continue to hover at a low level. Should this trend persist, it might become difficult for DOT to surpass the $6 mark in the future.
As an analyst, I would say: Besides the unpredictable nature of the token, Open Interest (OI) served as another confirming factor for my prediction. Open Interest refers to the number of outstanding contracts in the market that have not been settled yet.
An uptick in Open Interest (OI) signifies an influx of liquidity into the contracts linked to a specific cryptocurrency. On the other hand, a reduction in OI indicates that traders are reducing their net positions, leading to the withdrawal of funds from the market.
Currently, the Open Interest for Polkadot stands at approximately $131.77 million. A little over a week ago, this figure surpassed $250 million.
Based on this observation, it seems that DOT may lack the power to surpass the $7 mark in the near future as indicated by its recent downturn.
Next move may be down to $5.90
Furthermore, AMBCrypto analyzed the liquidation map for DOT. In essence, a liquidation map pinpoints specific price points where substantial margin calls could take place.
If a trader is unable to meet the necessary margin calls to maintain an open trading position, the exchange will forcibly close that position in a process referred to as liquidation. This action is taken to minimize additional losses.
In simpler terms, the estimated prices at which an asset can be liquidated can function as potential levels of support or resistance during market movements. For instance, in Polkadot’s market, a notable concentration of liquidity existed between the prices of $5.77 and $6.02.
Based on current market conditions, it’s possible for the DOT token price to trend towards a certain level in the near future. Yet, if this price action proves to be invalid, the token may instead head towards the range of $6.60 to $6.95.
Although many analysts hold a pessimistic view toward DOT, Michaël van de Poppe amongst them maintains a positive outlook for the token’s future value.
Read Polkadot’s [DOT] Price Prediction 2024-2025
Based on van de Poppe’s analysis, the price of DOT was signaling an accumulation stage. Furthermore, he expressed optimism about the project’s prospects, attributing it to its strong fundamental foundation, which bodes well for its growth in the upcoming years.
In his post on X (formerly Twitter), he noted that,
“Polkadot approaching a significant support level and zone for amassing strength. With the anticipated developments from the Relay Chain (RWA) and numerous projects under its umbrella, Polkadot is poised for substantial progression over the next few years.”
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2024-06-16 19:04