Is Polkadot (DOT) Price Undervalued as Institutional Interest Grows?

Analysis1mos agoUpdate 6086cf...
38 0

In Brief

  • Polkadot price is noting a rounding bottom bullish reversal pattern, which suggests a potential 14% increase.
  • Institutions are finding Polkadot to be a more lucrative investment than Ripple and Cardano this month.
  • The Price-to-Sales Ratio shows that DOT is undervalued, against the market capitalization.

The Polkadot (DOT) price is witnessing bullish momentum building at the moment, which is likely signaling further growth for the altcoin.

While DOT is expected to go further, how much can it rise with the institutional investors in its corner?

Polkadot Preferred by Institutions

As it is well known that institutions are the drivers of the bull run this year, it becomes important for cryptocurrencies to have their favor. Polkadot has successfully achieved this since the beginning of the year.

Since the beginning of the year, DOT has noted higher inflows than the likes of its competitors, such as Litecoin. Not only this but since March started, Polkadot’s inflows surpassed that of major cryptocurrencies – Ripple and Cardano. Both these tokens stand to be an institutional favorite, but DOT has managed to defeat them both.

Is Polkadot (DOT) Price Undervalued as Institutional Interest Grows?
Polkadot Institutional Inflows. Source: CoinShares

This proves that institutions are observing potential in the altcoin that even the investors may not have recognized yet. The same is evident from the fact that Polkadot believes that cryptocurrency is undervalued according to the price-to-sales (P/S) ratio.

The Price-to-Sales (P/S) ratio compares a company’s market capitalization (total market value) to its total sales revenue. It helps assess a company’s valuation relative to its revenue generation.

Is Polkadot (DOT) Price Undervalued as Institutional Interest Grows?
Polkadot P/S Ratio. Source: TokenTerminal

A lower P/S ratio may indicate a better value, while a higher ratio could suggest overvaluation. Such is the case with DOT, too, since its P/S ratio is far lower than it used to be on average historically.

DOT Price Prediction: Growth on the Horizon

Polkadot price has been observing a rounding bottom pattern over the past few weeks. Since the year started, this bullish reversal pattern took shape, breaching the neckline at the beginning of the month.

A rounding bottom pattern, seen in stock charts, suggests a reversal of a downtrend. It appears as a gradual decline followed by a gradual rise, forming a “U” shape. This pattern indicates a shift from selling pressure to buying interest.

It is also observed as a sign of potential price appreciation, anticipating the previous downtrend being exhausted. Confirmation often comes when the price breaks above the pattern’s neckline.

Is Polkadot (DOT) Price Undervalued as Institutional Interest Grows?
DOT/USDT 1-day chart. Source: Tradingview

At $10.61, Polkadot’s price has already completed half the expected growth of 31.3%, inching closer to the target price of $12. If the market conditions support further increase, DOT might end up tagging this target, fulfilling the bullish pattern.

However, if DOT holders opt to sell their holdings mid-way or Polkadot price fails to cross the $11 mark, the rise may slow down. A fallback to $10 is likely in such a case. A further loss of momentum would send the altcoin to $9.20. This would invalidate the bullish thesis and extend the wait to validate the rounding bottom pattern.

This article is sourced from the internet: Is Polkadot (DOT) Price Undervalued as Institutional Interest Grows?

Related: Shiba Inu (SHIB) Price Prediction – Will February End on a Bullish Note?

In Brief Shiba Inu’s (SHIB) price broke out from a descending resistance trend line but failed to sustain the upward trend. The daily time frame readings are undetermined, but the six-hour chart leans bearish because of the price action. Despite the bearish SHIB price prediction, breaking out from the parallel channel can trigger a significant increase. The Shiba Inu (SHIB) price trades inside long- and short-term ascending parallel channel patterns. SHIB made a breakout attempt on February 15 but failed to sustain the upward movement and fell afterward. SHIB Trades in Corrective Pattern The technical analysis of the daily time frame shows that the SHIB price has traded inside an ascending parallel channel since June 2023. The upward movement culminated with a high of $0.0000120 on December 17. Afterward, SHIB…

 

© Copyright Notice

Related articles

No comments

You must be logged in to leave a comment!
Login immediately
No comments...