The crypto markets have once again shown lackluster performance this week as uncertainty looms ahead of the U.S. inflation report release for July. Polkadot price has also taken a hit, dropping approximately 3% in the past 24 hours to $4.45. Despite this recent dip, the altcoin has managed to maintain a 6% increase over the past week, indicating a significant recovery from its low of $3.6 earlier this month. However, the long-term outlook for Polkadot remains optimistic as investors are hopeful about its potential in the Web3 technology revolution.
Investors continue to hold a positive view on the prospects of Polkadot in the crypto space. Many believe that the Polkadot blockchain ecosystem will play a crucial role in the decentralization of the web and in empowering content creators and consumers. The proposed JAM upgrade, spearheaded by Polkadot founder Gavin Wood, has also generated excitement among investors. The JAM network is expected to enhance the security and efficiency of cross-network communication, ultimately boosting productivity and supporting the growth of DOT’s price over time.
Looking back at Polkadot’s price history, the altcoin reached a peak of $54 in the fall of 2021 before the onset of the global inflation crisis. Over its four-year existence, the average price of Polkadot has hovered around $13, marking a significant increase compared to its current levels. The recent correction pushed the DOT price towards a major horizontal support at $3.5, which is expected to provide strong support for the altcoin. A successful bounce off this support zone could lead to a move towards the next resistance block at $6-7.
The recent bounce off the crucial support level has created the potential for a double bottom formation, a bullish pattern that could propel Polkadot price towards higher levels. For this pattern to be activated, the price action must break through the neckline just below the $12 mark. If successful, the Polkadot price is likely to continue its rally, eventually reaching the $20 zone and completing the double bottom pattern. However, the realization of this bullish scenario is contingent on a more favorable risk sentiment in the market.
While the recent performance of Polkadot may have been underwhelming, the altcoin’s long-term prospects remain promising. With ongoing developments such as the JAM upgrade and the potential for a double bottom formation, investors are hopeful that Polkadot will continue its upward trajectory in the future.