Polkadot’s price has shown signs of waning bullish momentum, failing to breach the previous swing high of $7.7. Analyzing the futures market sentiment is crucial in determining whether this uptrend will continue, as futures market activity significantly influences price movements.
This chart presents the funding rate and open interest metrics alongside Polkadot’s daily price movements. Despite the recent bullish move, open interest and funding rates have remained near their lowest levels, showing no significant increase. This indicates a lack of strong bullish momentum and raises the possibility of a consolidation correction.
This suggests that market participants are not increasing their long positions significantly, indicating a lack of confidence in continuing the uptrend. Given the dormant funding rates and low open interest, the likelihood of a consolidation correction increases.
This means that Polkadot may enter a period of sideways movement or slight declines before determining its next direction. Nevertheless, if the open interest and funding rates increase, this would signal renewed bullish momentum. An uptick in these metrics would indicate that traders are gaining confidence and entering more aggressive long positions, potentially solidifying the uptrend.
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