The Polkadot price set a new record of $55.12 on Wednesday as the total value of altcoins surged to $1.56 trillion. Polkadot (DOT) is trading at $52.77 (-1.16%), a 7-day gain of 29.5%, and +470% year-to-date. Polkadot’s current market cap is $51.8 billion, ranking it the 8th most valuable cryptocurrency behind Ripple (XRP).
Several bullish catalysts have emerged for Polkadot recently. Firstly the cryptocurrency market, especially altcoins, is extremely robust. In the last two days, the combined value of all cryptocurrencies (Excluding Bitcoin) has reached a new record. Secondly, the Polkadot council signed off on Parachain registrations and crowd loans on the 1st of November.
Whilst those are encouraging for the project, I suspect the recent rally has more to do with founder Gavin wood predicting the Polkadot price could climb above $120. As a result, the open interest on Polkadot futures contracts has passed $1b for the third time ever. Notably, on both previous occasions, the OI reached $1b, DOT crashed over 40% within a week.
The daily chart shows the Polkadot price has broken out of a rising wedge formation. Furthermore, DOT has cleared the resistance of the former all-time high at $50.75, which now acts as support. The top of the wedge offers additional support at $49.20. However, the Relative Strength Index is rolling over from an overbought reading, which suggests potential fatigue.
As long as the DOT remains above the wedge, the outlook is constructive and suggests a push above $60 is possible. However, a drop below $49.20 on a closing basis invalidates the bullish view.
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