Crypto markets continued their disappointing performance this week, with risk sentiment remaining subdued ahead of the July US inflation report.
Polkadot fell and the price also faced pressure, falling around 3% in the past 24 hours to $4.45.
Despite this decline, the altcoin is still up almost 6% last week, representing a remarkable rebound after falling to $3.6 at the beginning of this month.
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Optimism surrounds future prospects
In the long term, investors maintain an optimistic outlook on the DOT’s prospects.
Many still believe that the blockchain system will be crucial in the Web3 technology revolution aimed at decentralizing the web, empowering creators and consumers, and moving away from centralized control by major social media platforms.
Investors are also excited about the proposed JAM upgrade, introduced by Polkadot founder Gavin Wood. This project will replace the existing centralized migration chain with the more advanced and flexible JAM network, which promises enhanced security and effective connectivity over the network.
Although JAM is still under development and unlikely to be released before 2025, its ability to boost productivity is expected to support DOT price growth over time.
DOT/USD Technical Analysis
Looking back, the price of the Polcadot reached a peak of $54 in the fall of 2021, just before the onset of the global inflation crisis. Over its four-year history, the average price of a polkadot has averaged around $13, more than 190% higher than current levels.
The latest correction pushed the price of DOT towards $3.5, a massive horizontal support that would provide significant support. A sustained rebound from this support zone could lead to a move towards the next large resistance block, which is around $6-7.
More importantly, the rebound from this important area has created the possibility of forming a double bottom. This bullish pattern can be activated if price action breaks through the neckline, which is located below the $12 handle.
In this case, the price of the Polkadot is likely to continue to rise and is expected to eventually reach the $20 zone, which will mark the completion of the double bottom pattern. However, this bullish development is contingent on more positive risk sentiment.
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