🌎 Polkadot Price May Soon Exit Three Year Consolidation

Three Key Reasons Why Polkadot’s Price May Soon Exit Its Three-Year Consolidation

Polkadot (DOT) has underperformed its closest peers, including Solana, Binance Coin, and Tron, remaining in a three-year consolidation between $3.85 and $11.7. As a result, its price action has seen it drop in crypto rankings, moving from a top ten coin in 2021 to the 22nd biggest one. However, there are several reasons why the DOT price may soon surge.

Potential Spot Polkadot ETF Approval

A potential reason for the Polkadot price surge is the Securities and Exchange Commission’s potential approval of a spot DOT ETF. 21Shares filed for the fund earlier this month, and the SEC has hinted at being more friendly to the cryptocurrency industry. This could lead to faster approval of spot ETFs, exposing them to Wall Street investors. Most cryptocurrencies with higher odds of ETF approval, such as XRP and Litecoin, have surged in the past few weeks. Polkadot could join the rally as it remains near its all-time low.

Polkadot JAM Upgrade

The migration to the Joint-Accumulate Machine (JAM), part of the Polkadot 2.0, is another reason why the Polkadot price could surge. JAM aims to combine the existing strengths of Polkadot and Ethereum, replacing the Relay Chain in the future. It also hopes to solve challenges that have affected Polkadot, such as high parachain costs, isolation, and limited parachain auctions.

Polkadot 2.0 will enable developers to build applications directly without going through the parachain process. They will take advantage of existing Polkadot features, including high bandwidth, resilience, and speed. Polkadot can handle over 140,000 transactions per second, much higher than Solana’s 3,000.

Strong Technicals

Polkadot also has strong technicals that may push its price higher over time. The chart shows that DOT has remained between the support at $3.85 and resistance at $11.71 in the last three years, recently retesting the lowest side of this channel. This consolidation mirrors what happened to XRP, a token that has surged lately, and is a sign of accumulation, the initial stage of the Wyckoff Theory.

A strong breakout above the upper side of the channel will signal more gains ahead, with the initial target being at $23.5, the 38.2% retracement level that is about 365% above the current level.