Polkadot (DOT) is sending signals that it is starting a new bullish reversal after months of bearish downtrend. The cryptocurrency has created a double-bottom pattern on its price chart, suggesting a potential bigger move to the upside. Coupled with promising developments in its network and decentralized finance (DeFi) ecosystem, Polkadot may experience a strong price surge in the coming weeks or months. Investors are closely watching DOT to see if it can reclaim important resistance levels to validate this bullishness.

Double Bottom Formation Signals Reversal

Ever since November of last year, Polkadot has been in a acute downtrend that has worried the buy-and-hold-investor. Explore the detailed Polkadot price chart on TradingView. Right away you’ll see a nice double-bottom pattern starting around the $3.20 area. This technical formation is one of the most common bullish reversal signals. It tells you that the price has found a bottom, a support floor, and is all set for a bullish breakout.

The neckline of this double-bottom pattern is now at $5.36. An equally important aspect of the bullish reversal is this sizeable inverted head and shoulders pattern. Such announcement would likely set off a major catapult. Technical analysts often estimate the possible profit target from a double-bottom pattern. They achieve this by taking into consideration the depth of the neckline and the lowest point on the pattern.

Potential Price Target and Invalidation Level

According to the double-bottom Pattern, Polkadot’s profit target is up to $11.65. This target implies an upside of 225% from today’s price. If the pattern plays out how many are anticipating, there’s a lot of money to be made investors. A decisive move above the neckline at $5.36 would make a Polkadot rally to this lofty target more likely.

At the same time, it’s important to recognize that risk. Support from the $3.20 area, the bottom of the double-bottom pattern would negate the bullish scenario. Such a move would indicate even more downside potential and would force investors to re-evaluate their long-held positions.

Network Upgrades and DeFi Growth

Meanwhile, Polkadot continues to develop and onboard more network capabilities. Especially the asynchronous phase, which will halve block times from 12 seconds down to 6 seconds. This upgrade could make Polkadot one of the most efficient blockchains, in terms of speed, in the entire crypto industry. Polkadot is currently in the process of rolling out elastic scaling. This feature has already been tested on Kusama and is scheduled to go live on Polkadot this quarter.

Along with these network improvements, Polkadot’s DeFi ecosystem is booming. And leading Hydration, one of Polkadot’s breakout DeFi stars, is quickly nearing overtaking Cardano in total value locked (TVL). Cardano has accumulated $326 million in TVL.

Staking Yield and Investor Incentives

Polkadot is the most attractive staking yield right now at 11.8% yield. This yield surpasses that of other prominent blockchain networks like Ethereum, Solana, and Sui, making Polkadot an appealing option for investors seeking passive income. The elevated staking yield will bring more participants to the network, providing even more strength and stability through participation.