Polkadot (DOT) price has remained in a three-year consolidation phase as concerns about its ecosystem remained. The DOT token was trading at $4.35 on Saturday, down by over 90% from its highest level in 2021. This article lists three reasons why the Polkadot price may exit the three-year consolidation and go parabolic in the next few months.
Polkadot price has strong technicals
The first main reason why the DOT price may surge soon is that it has strong technicals, especially when you consider the weekly chart.
This chart shows that the Polkadot price crash has found a strong support at $3.742. It has attempted and failed to drop below that level at least four times since 2024. All attempts to move below that level faced substantial resistance, meaning that the coin has formed a quadruple bottom whose neckline is at $11.
This means that even a jump from the current $4.36 to that neckline would be by a 169% surge from the current level. Most notably, we have seen many cryptocurrencies, including Bitcoin, Solana, and XRP surge to their all-time highs.
This means that Solana price needs to jump by 1,153% from the current level. While this seems impossible, some tokens like Mantra have achieved a similar performance in the past few years.
DOT price chart by TradingView
Spot DOT ETF approval hopes
The other potential catalyst for the Polkadot price is that 21Shares and Grayscale have filed for a spot Polkadot ETF with the Securities and Exchange Commission (SEC).
There are rising odds that the SEC, under the Trump administration, will approve these crypto ETFs.
That’s because the current SEC is much different than during the Gary Gensler era. Gensler focused on litigation, while the current leadership is focusing on working with the crypto industry. For example, officials have already ended lawsuits on some of the biggest companies in crypto like Gemini, Uniswap, and OpenSea.
Therefore, there is a likelihood that the SEC will approve a spot DOT ETF, which will lead to more inflows.
USA crypto reserves inclusion
Donald Trump has signed an executive order that will create Strategic Bitcoin Reserves (SBR). In the same executive order, he directed the Treasury Department to create a stockpile of digital assets.
In a recent statement, he identified three coins that will include these stockpiles, including XRP, Solana, and Cardano. Most notably, his statement noted that he will be willing to add other valuable coins into these reserves.
Polkadot fits the bill for a such fund. For one, it was established by Gavin Wood, a technology expert who was part of the founding team of Ethereum, the second-biggest crypto in the industry.
Additionally, Polkadot has utility in that its ecosystem is made up of several parachains like Astar, Acala Network, Moonbeam, Efinity, and Centrifuge.
Polkadot 2.0 upgrade
Finally, Polkadot price may surge because of the upcoming Polkadot 2.0 upgrade that will transition it into a more accessible network. One of the biggest changes is known as the Join-Accumulate Machine (JAM), which will boost its scalability, flexibility, and decentralization.
JAM will have numerous features, including decentralized supercomputing, parallel processing, and permissionless deployment. The latter one is important because it will ensure that developers can build without going through the parachain auction process that was highly expensive and time consuming.
Polkadot 2.0 will also introduce the Polkadot Virtual Machine (PVM), making it easy to deploy smart contracts.
Therefore, all these features mean that the Polkadot price will likely continue doing well in the long term. On top of this, it is one of the most rewarding cryptocurrencies with a staking yield of over 10%.
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