Polkadot price remains 40% below its highest level in December, but a rare chart pattern on the daily chart points to a strong rebound.
Polkadot (DOT), a leading layer-1 network with a market cap of $11 billion and a staking yield of 12%, has underperformed large-cap cryptocurrencies over the past few years.
This performance is likely due to its ecosystem being less prominent compared to other chains like Solana (SOL) and Ethereum (ETH). Solana is widely recognized for its meme coins and popular decentralized exchange networks like Raydium and Orca.
On the other hand, Ethereum is known for its extensive ecosystem, which includes decentralized applications such as AAVE and Compound, as well as numerous ERC tokens that rely on its technology.
Polkadot is working to change this as part of the Polkadot 2.0 initiative, which aims to scale the network for a wide range of use cases. This includes upgrading its asset hub to support Ethereum Virtual Machine and Solidity-based smart contracts.
Polkadot will also introduce elastic scaling, enabling developers to dynamically adjust throughput, and a unified address format. Other key upgrades planned for this year include using DOT as the universal fee token across all parachains.
The developers hope these upgrades will make Polkadot the go-to blockchain for developers in industries such as gaming and decentralized finance.
There are signs that these initiatives are starting to deliver results. For example, the amount of Tether and USD Coin within its ecosystem’s parachains has grown by 400% over the past 12 months, reaching more than $114 million.
https://twitter.com/Polkadot/status/1879818655128555539
Polkadot is also an American crypto project that could benefit from the Trump administration. For instance, it may be one of the projects to receive a spot ETF approval. Trump has indicated he might be open to including some American crypto projects in a US reserve.
Polkadot price technical analysis
The daily chart shows that the DOT price has formed two chart patterns that could drive it higher in the near term. It has formed a double-bottom pattern at $6, a widely recognized formation that often leads to bullish breakouts.
Polkadot has also formed a falling wedge pattern, characterized by two descending and converging trendlines. It has moved above the 100-day moving average, a signal that bulls are gaining control.
As a result, the coin is likely to experience a bullish breakout, with the next key level to watch being $11.65, its highest swing on Dec. 4 and 60% above the current level.
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