Los Angeles, California – The cryptocurrency Polkadot (DOT) has experienced a decline in open interest and volatility, suggesting a lack of demand for the token. This drop in interest has raised concerns that the price of DOT may fall to $5.90, according to a liquidation heatmap analysis.
Since mid-June, Polkadot has been trading between $6.10 and $6.25, but recent data indicates that this sideways trend may not continue. Volatility in the crypto market refers to the frequency of price fluctuations, with higher volatility indicating greater price swings.
Recent data from Santiment shows that Polkadot’s one-day volatility has dropped to its lowest level since mid-May, indicating a period of low volatility. Additionally, the decrease in open interest for Polkadot, currently at $131.77 million compared to over $250 million a week ago, suggests a lack of strength to break through the $7 mark in the short term.
Analysts have also evaluated Polkadot’s liquidation heatmap to identify potential price levels where large-scale liquidation events might occur. The heatmap shows a cluster of liquidity between $6.02 and $5.77, indicating a possible price movement towards that range in the short term.
Despite the bearish outlook for Polkadot, some analysts, like Michaël van de Poppe, believe in the token’s long-term potential. Van de Poppe notes that DOT is currently at an accumulation point and highlights the project’s strong fundamentals, suggesting that it will perform well in the coming years.
While short-term indicators point to a potential price drop for Polkadot, long-term prospects remain optimistic for the cryptocurrency. With analysts like van de Poppe highlighting its potential for growth based on fundamental factors and market dynamics, Polkadot may still have room for positive momentum in the future.