Polkadot Price Surges 9% on Bullish Cup-and-Handle Pattern — Is $5 Next for DOT?

Polkadot (DOT) has erupted back into the spotlight after weeks of subdued movement. With a sharp 9% daily gain, the digital asset has climbed past $4.00, signaling renewed bullish enthusiasm across the market. The current price action is more than just a spike; it represents a notable shift in sentiment driven by technical formations and improving macroeconomic conditions. At the heart of this renewed rally is a classic technical pattern known as the cup-and-handle formation. It suggests that the Polkadot price surge may have the momentum and setup required to challenge the next psychological barrier, the $5.00 mark.

Is Polkadot Building Toward a Breakout?

Polkadot’s chart pattern speaks volumes. After bouncing from support below $3.75, DOT live price increase reclaimed the $3.85 level with strength and now trades above $4.10. The asset displays a well-defined cup-and-handle setup during the daily timeframe, typically a precursor to a breakout in technical analysis. This formation, combined with higher trading volume, reflects a healthy structure. The accompanying volume surge supports the idea that this Polkadot price surge is not just speculative hype but a rally built on solid market demand. DOT is also benefiting from increasing bullish sentiment, pushing toward the key resistance zone at $5.

Chart 1- DOT/USDT Live Price, published on TradingView, April 23, 2025.

Derivatives Data Supports Bullish Sentiment

The derivatives market reveals another layer of insight. Open Interest has risen by 12.89%, and trading volume jumped over 45% to $494 million. These indicators show that new money is entering the market, a clear signal of confidence in continued gains rather than short-term profit-taking. This is especially important because it points to an organic rally. The Polkadot bullish breakout isn’t driven solely by speculators but by genuine investor conviction. Traders are positioning themselves for continuation, not exit, a signal that this bullish phase may have legs.

Liquidations Fuel the Rally

A wave of liquidations also helped DOT clear significant resistance levels. Over $350K in short positions were wiped out, compared to under $50K in long liquidations. This imbalance triggered a Polkadot bullish breakout, stopped losses and created a fast upward push as shorts were forced to cover their positions. The liquidation map from Binance highlights a thick zone of short pressure between $3.75 and $4.10. With DOT live price now trading above this range, the path ahead appears clearer. The next resistance lies at $5.00, and the market structure suggests it is not as far-fetched as it seemed just days ago.

Chart 2- DOT/USDT Live Price, published on TradingView, April 23, 2025.

Macro Liquidity Backs the Uptrend

Polkadot is also gaining from favorable macroeconomic conditions. The M2 Global Liquidity Index recently ticked up to 97.3, suggesting greater capital availability. Historically, DOT has shown a strong correlation with liquidity cycles, making this an encouraging sign. Increased global liquidity often translates into more aggressive buying in risk assets. Polkadot is currently riding that wave. This alignment adds another confirmation to the Polkadot price surge, reinforcing that the bullish case is not isolated but part of a broader shift in market dynamics.

What Comes Next for DOT?

All signs point to DOT being in a strong position. From technical indicators like the cup-and-handle pattern to macro data supporting capital inflow, Polkadot’s current rally is grounded in more than short-term hype. The ongoing DOT price increase could very well test the $5 resistance if bullish momentum holds. Market watchers should keep an eye on volume and Open Interest to gauge the strength of the trend. As long as these remain elevated and liquidation pressure continues to thin out, the Polkadot bullish chart setup stays intact.

Is $5 the Next Stop?

The Polkadot bullish chart’s latest move reflects a convergence of technical strength and supportive market conditions. With increasing trading activity, reduced resistance from shorts, and macro liquidity expansion, the asset seems poised to sustain its upward trajectory. As the Polkadot price surge continues, DOT looks ready to test the $5 psychological barrier. If buying pressure holds firm and market sentiment remains bullish, this target could be reached sooner rather than later.