Polkadot (DOT) has overcome a prolonged downtrend, which may signal the start of a new price growth. However, the upcoming token unlock could cause short-term volatility.
Breakout After Prolonged Downtrend
Polkadot (DOT) has broken out of a prolonged falling wedge, indicating a potential trend reversal. Market analyst Captain Faibik noted that DOT has officially moved above its descending structure, supported by strong bullish volume.
Bullish Structure Forms at Key Support Levels
DOT is trading near the $4.10 level after pulling back slightly from a local high of $4.19. Technical analysts report the formation of a bullish flag after the breakout, indicating potential for another upward leg if support is maintained. The $4.05 zone is now acting as a key level, flipping from resistance to support.
Token Unlock May Add Short-Term Pressure
Polkadot plans to unlock 2.3 million DOT tokens between July 14 and July 21. According to tokenomist data, this amount represents about 0.15% of the current supply, valued at approximately $9.39 million. Although the percentage of new tokens is relatively small, unlocks often induce short-term volatility. Market participants are closely monitoring potential sell pressure as these tokens enter circulation.
Market observers anticipate further movements for DOT considering the recent breakout and upcoming events related to token unlocks. The combination of technical factors and short-term influences could significantly affect price dynamics.
