Polkadot (DOT) has seen a significant price surge, jumping 12% following Grayscale’s recent filing for a Polkadot exchange-traded fund (ETF). This move comes on the heels of similar ETF applications for XRP and Dogecoin (DOGE), signaling increasing institutional interest in alternative cryptocurrencies. However, despite the bullish momentum, analysts question whether DOT can sustain its gains amid prevailing bearish technical patterns.
Grayscale’s Polkadot ETF Filing and Market Reaction
On February 25, Nasdaq confirmed that Grayscale had submitted a 19b-4 form to the U.S. Securities and Exchange Commission (SEC) to review the Polkadot ETF proposal. If approved, the ETF would provide investors with exposure to DOT without requiring direct ownership of the cryptocurrency.
Interestingly, Grayscale is not alone in this endeavor. Earlier this month, 21Shares also filed for a Polkadot ETF, but the market reaction was less pronounced. DOT’s price hovered around $4.30 before the latest ETF filing but has since climbed closer to $5. However, it remains confined within a descending triangle pattern, a traditionally bearish formation that raises concerns about the rally’s sustainability.
Technical Analysis: Can DOT Break Resistance?
Despite the recent price uptick, DOT continues to trade within a descending triangle, characterized by a declining upper trendline and a relatively stable lower support. Historically, this pattern signals potential downward pressure unless a breakout occurs.
The Supertrend indicator, a widely used momentum gauge, currently flashes a bearish signal. The indicator’s red segment remains above DOT’s price, suggesting that downside risks persist. If DOT fails to breach the upper trendline, resistance levels around $6.31 and $7.44 could remain out of reach.
What’s Next for Polkadot?
If DOT manages to break out of its descending triangle, the next resistance target would be $8. Further bullish sentiment, potentially fueled by positive ETF news, could push DOT toward $10. However, if the bearish pattern holds, DOT could retrace below $4 in the near term.
Also Read: Polkadot (DOT) Price Rebounds as Nasdaq Files for Grayscale ETF – Is a Surge to $34 Next?
With the SEC’s ETF decision pending, Polkadot remains at a crucial turning point. Traders should monitor key resistance levels and market developments closely before making any moves.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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