Polkadot puts eyes on a 55% bull run setup amid strong DOT holdings among institutions

YEREVAN (CoinChapter.com) – The price of Polkadot (DOT) has dropped 86% when measured from its November 2021 record high of $55, trading at $7.7 this June 28.

DOT in a Falling Wedge

DOT has been forming a “Falling Wedge” pattern, confirmed by price fluctuating inside two descending, converging trendlines. Falling Wedges are considered bullish reversal patterns, which increases DOT’s possibility of escaping its bearish trend in the coming days.

Also read: Polkadex Closes In on a Polkadot Parachain Slot

DOT/USD daily price chart. Source: TradingView.com

Also, a Falling Wedge breakout typically leads to the price moving by as much as the maximum distance between the structure’s trendlines. That pins the target price at $12, almost 55% higher than today’s price.

Bullish divergence

DOT picks additional bullish cues from an ongoing divergence between its falling prices and rising momentum.

In detail, DOT’s price has been printing lower lows compared to its daily relative strength index (RSI), a momentum oscillator forming higher lows. That signals a weaker downside momentum, meaning the price could undergo a bullish reversal.

Also read: Polkadot founder Gavin Wood slammed for promoting DOT amid Ukraine crisis.

Polkadot adoption grows

According to the analytical platform Messari, Polkadot (DOT) was the most commonly held asset among crypto-focused fund portfolios, Bitcoin and Ethereum excluded.

Kaushik Guduru, a Messari analyst, posted the H1 2022 results. 29 firms out of 82 held Polkadot, while Oasis protocol followed 24 funds in its corner and Nervos Network with 23 funds.

Also read: Polkadot, the most commonly held altcoin among hedge funds — Report.

The smart contract frenzy remains active as smart contract platforms are once again the most heavily invested market sector. Evidently, the top three invested assets this quarter are all smart contract platforms.
added the expert.

Moreover, according to the media channel Generation Crypto, Polkadot was the second-largest project by development activity after Cardano (ADA).

Also read: Bitcoin risks another massive selloff on recession fears, asserts analyst as BTC wobbles around $20K.

While Polkadot seems like a safe choice for many crypto funds, the volatility across the market continues. As CoinChapter previously reported, the risk-on assets eye more losses while the economy could slide into stagflation and recession.

Thus, Polkadot’s triple-digit rally in times of a ubiquitous decline is unlikely. However, should Bitcoin bottom out soon, DOT could follow suit and meet the Falling Wedge’s target.