Today, March 6, the price of Polkadot fell by 3%, even as market participants were waiting for the first correction of the DOT ETF and Tokenomics.
Conclusion
- 21Shares is launching its first DOT ETF today.
- The fund amounts to 11 million dollars.
- History suggests that the fund may struggle to attract inflows.
Polkadot Token (DOT) fell to $1.4753, down significantly from this month’s high of $1.745. This pullback came before the 21Shares DOT ETF launched today.
Eric Balchunas, a Bloomberg reporter, noted that the fund was created with $11 million in assets. Considering that the three Dogecoin ETFs have collected $7.45 million in revenue and have $9.27 million in net assets, this is a significant amount.
In theory, the launch of the DOT ETF should increase its price because it will be available to US retail and institutional investors. However, data shows that demand for altcoin ETFs is limited.
The Spot Avalanche ETF added just $8.98 million in inflows. It has not been logged in since February 24th. Similarly, the Spot Hedera and Chainlink ETFs have brought in less than $100 million since their inception.
Polkadot’s situation is worse than other chains due to its smaller ecosystem. For example, while Ethereum has more than $165 billion in stablecoins, Polkadot’s parachain has less than $100 million.
DOT prices will also react to the upcoming Tokenomics overhaul on March 12. This overhaul will reduce supply by 2.1 billion and reduce emissions by 53.6%. Inseparable days are reduced from 28 days to 24 to 48 hours.
Polkadot price forecast: technical analysis
The DOT token has retreated over the past few days, moving from this month’s low of $1.7445 to the current $1.4673. A closer look shows that it retested the necklace of the double bottom pattern that occurred at $1.2260. A pattern of breaks and retests is a common continuation sign.
The coin also has a pattern of the Bulgarian flag. This pattern has a flag pole and a descending channel that resembles a raised flag. Therefore, the coin may attract bids in the next few days. If that happens, the next key target to watch will be $1.7445. A break above this price would indicate further gains, possibly up to $2.
