- On May 24, the Polkadot (DOT) price experienced a spike of 5% on a daily chart, helping its value to soar above $1.27 with a market capitalization of around $2.15 billion.
- The spike in cryptocurrency comes after a rebound in the overall cryptocurrency market, where Bitcoin (BTC) price witnessed a spike of 3%.
- The update in the tokenomics of Polkadot and new upgrades like Polkadot 2.0 have triggered an upward momentum in the DOT price.
On Sunday, Polkadot (DOT) price witnessed a spike of 5% on a daily chart amid a small rebound in the Bitcoin (BTC) price.
At the time of writing this, Polkadot (DOT) is trading at around $1.27 with a market capitalization of $2.15 billion, according to CoinMarketCap. The daily trading volume is currently revolving around $142.76 million.
While the cryptocurrency is trading below its all-time high of around $55, it is still showing some resilience to its recent lows at around $1.20. The trading volume is still pretty good.
Polkadot Soars with Spike in Bitcoin Price
According to the current price chart on TradingView, Polkadot (DOT) has created an inverse head and shoulders pattern in the short-term timeframes. The pattern is creating a classic signal and saying that it might create a reversal from a downward trend to the uptrend. The price of Polkadot is also heading into a symmetrical triangle or a small bull flag pattern after breaking out of a short-term downward trend.
According to the current price chart, there are major support levels at around $1.20 to $1.25. On the other hand, there is a major resistance level at around $1.40 to $1.63. If the Polkadot surges above the $1.50, it will open the door for the cryptocurrency to witness more spikes in the next few days. In the other trend, if the cryptocurrency fails to hold the support level at around $1.20, then it might test another support level.
On Sunday, the overall cryptocurrency market witnessed a small rebound, and it helped DOT to witness a small spike. After dipping below $75,000, the Bitcoin (BTC) price has witnessed a surge of approximately 3% and surpassed the mark of $76,500. Bitcoin (BTC) is hovering around $76,825 with a market capitalization of around $1.53 trillion. Along with the upward momentum in Bitcoin and Polkadot, other altcoins like Ethereum have also experienced small spikes on a daily chart.
Major Tokenomics Makes DOT Scarcer Than Ever
Apart from technical factors, the recent major developments on the Polkadot network are playing a major role in the upward momentum of the cryptocurrency. In March, the Polkadot community introduced a hard supply limit of 2.1 billion DOT tokens. Apart from this, it has also cut down the yearly release of new tokens by around 54%, which helped it to reduce the inflation. According to the report, the inflation has plunged from 7% to down to around 3%. These changes in the tokenomics will make it more like Bitcoin as it becomes scarcer over time.
Apart from this, there is an update on how staking works. The change in the staking mechanism will cut down the time for users to unlock their staked tokens. It has also enhanced the mechanism to grant validators. These new changes are expected to boost network security while reducing the selling pressure that comes from newly generated tokens.
Polkadot is also seeing the growing adoption of real-world asset tokenization as new projects like Centrifuge are joining the network.
