Polkadot price retreated by 3% today, March 6, even as market participants waited for the first DOT ETF and tokenomics overhaul.
Summary
- 21Shares will launch the first spot DOT ETF today.
- The fund will be seeded with $11 million.
- History suggests that the fund may struggle to attract inflows.
Polkadot (DOT) token dropped to $1.4753, down substantially from this month’s high of $1.745. This retreat happened ahead of the launch of the 21Shares DOT ETF today.
Bloomberg’s Eric Balchunas noted that the fund has been seeded with $11 million in assets. This is a substantial amount considering that the three Dogecoin ETFs have accumulated $7.45 million in inflows and have $9.27 million in net assets.
In theory, the launch of the DOT ETF should boost its price as it will make it available to American retail and institutional investors. However, data shows that demand for altcoin ETFs is limited.
Spot Avalanche ETF has added just $8.98 million in inflows. It has had no inflow since February 24. Similarly, spot Hedera and Chainlink ETFs have had less than $100 million in inflows since their launch.
Polkadot’s situation is worse because of its smaller ecosystem than the other chains. For example, while Ethereum holds over $165 billion in stablecoins, Polkadot’s parachains hold less than $100 million.
DOT price will also react to the upcoming tokenomics overhaul on March 12. This overhaul will cap the supply to 2.1 billion and cut emissions by 53.6%. Staking unbonding days will drop from 28 days to between 24 and 48 hours.
Polkadot price prediction: technical analysis
DOT token has pulled back in the past few days, moving from this month’s low of $1.7445 to the current $1.4673. A closer look shows that it has retested the neckline of the double-bottom pattern that happened at $1.2260. A break and retest pattern is a common continuation sign.
The coin has also formed a bullish flag pattern. This pattern has a flagpole and a descending channel, resembling a hoisted flag. Therefore, the coin may attract bids in the next few days. If this happens, the next key target to watch will be at $1.7445. A break above that price will point to more gains, potentially to $2.
