Polkadot’s DOT token slid nearly 5% in the past 24 hours, despite the network’s community approving a landmark governance proposal that reshapes its tokenomics.

On Sept. 14, the team confirmed via X that the community had passed the “Wish for Change” proposal, which sets a hard cap of 2.1 billion DOT.

The move ends Polkadot’s open-ended issuance model, which generated roughly 120 million new tokens yearly.

Currently, around 1.6 billion tokens are in circulation, meaning more than three-quarters, or 76%, of the eventual supply has already been minted.

Polkadot said it aims to stabilize its long-term economic design by introducing scarcity and winding down inflation as a funding mechanism. The change highlights a broader effort to reduce dependence on perpetual issuance and push the ecosystem toward alternative revenue streams.

DOT’s new inflation schedule

The new framework introduces a stepped-down inflation schedule beginning March 14, 2026. Under the revised model, token issuance will taper over a two-year adjustment period.

Polkadot estimates that about 1.91 billion DOT will be in circulation by 2040, which is far below the 3.4 billion projected under the old system. The final cap is expected to be reached around the year 2160.

To manage this process, the proposal outlines three schedules for reducing inflationary pressure. One option immediately cuts emissions by more than half before easing off, while another applies sharper early reductions followed by a gradual decline through the next century.

Polkadot’s ecosystem changes

The governance overhaul arrives as Polkadot works to strengthen its position against rivals like Ethereum through initiatives such as Polkadot Capital Group, which seeks to bridge traditional finance.

It also coincides with the return of co-founder Gavin Wood as CEO of Parity Technologies, the blockchain network’s development arm.

Yet these moves have failed to halt the token’s slide.

At press time, DOT trades at roughly $4.20, according to CryptoSlate data, marking a fresh 24-hour decline of nearly 5%.

The drop compounds a broader downturn, with the asset losing about 34% of its value since the start of the year.

Mentioned in this article

The structure suggests that bearish momentum may be weakening, allowing buyers to step in. With volume expected to increase upon a breakout, this pattern could mark a pivotal shift for DOT and spark a strong upside move, potentially starting a new bullish phase.

Why The Polkadot Falling Wedge Is Bullish

Crypto analyst Jascrypto recently highlighted that Polkadot has completed a breakout from a multi-month falling wedge pattern. Falling wedges are typically viewed as reversal patterns, and DOT’s successful breakout suggests that downward pressure may be easing after months of consolidation. This structural shift reflects growing optimism and signals that the asset could be preparing for a larger upward trend.

Jascrypto pointed out that DOT is currently testing the 100-day and 200-day Exponential Moving Averages (EMAs), key technical levels that often act as strong resistance in bearish conditions. He emphasized that a decisive daily close above these EMAs would validate the breakout and signal a shift in market sentiment.

According to Jascrypto, if Polkadot maintains momentum and closes above these critical levels, it may pave the way for a rally toward the $5.5 to $6.0 range in the near term. This move would mark a significant recovery phase for DOT, attracting fresh bullish interest from investors.

In an alternative scenario, Jascrypto noted that the worst-case outcome might see Polkadot dipping as low as $3.120 on higher timeframes. However, he added that such a move could set the stage for a much stronger rebound, propelling the price above the $7 mark once momentum returns.

Momentum Indicators Lean Bullish – Is DOT Ready To Run?

Momentum indicators are beginning to align in favor of the bulls, offering promising signals that Polkadot may be gearing up for a meaningful move higher. The 4-hour Relative Strength Index (RSI) has rebounded from oversold territory, hovering near the midpoint around 50. This shift indicates that bearish momentum is fading, and buyers may be gradually regaining control.

Adding to the optimistic trend, the 4-hour Moving Average Convergence Divergence (MACD) has shown a bullish crossover, where the MACD line crosses above the signal line. A move that often marks the beginning of a new uptrend or a pause in prior downside pressure. Combined, the RSI’s recovery and the MACD’s bullish signal suggest that DOT’s momentum is shifting favorably, setting the stage for a potential breakout continuation if price action remains strong.

The update suggests that 21Shares is actively engaging with the SEC, possibly incorporating regulatory feedback or strengthening its case for approval.

If approved, the Polkadot ETF would trade on the Cboe BZX Exchange, with Coinbase as the custodian of the DOT holdings.

This move aligns with broader industry efforts to introduce crypto-based ETFs. On Feb. 25, Grayscale also filed for a spot Polkadot ETF through Nasdaq.

Alongside its Polkadot proposal, 21Shares has recently filed for ETFs tracking Ripple (XRP) and Solana (SOL), adding to its existing Bitcoin (BTC) and Ethereum (ETH) ETF offerings.

The Market Implications of a Polkadot ETF

Introducing a spot Polkadot ETF could have significant implications for institutional and retail investors.

As Polkadot aims to be the leading multi-chain interoperability protocol, increased institutional adoption through an ETF could enhance its market position and long-term viability.

However, despite its technological promise, Polkadot has struggled with price volatility and investor uncertainty.

According to CoinGecko data, DOT has faced a 56.0% decline over the past year and a 2.9% drop in the last month.

21Shares acknowledged this risk in its SEC filing, stating that the ETF’s performance would be directly tied to Polkadot’s market movements.

Bloomberg ETF analyst James Seyffart shared a similar sentiment, emphasizing that the success of such an ETF will depend on investor demand.

“The market will decide where value lies and if there’s value in launching such a product. If no one puts money into a Polkadot ETF, it will close,” he stated.

Beyond price performance, regulatory uncertainties add another layer of complexity.

The SEC has yet to clarify whether DOT should be classified as a security under U.S. law.

In response, the Web3 Foundation, which oversees Polkadot’s development, has taken proactive steps to ensure DOT remains a decentralized asset and avoids excessive control by any single entity.

These efforts include rejecting investment-only purchases from venture capitalists and focusing on promoting Polkadot’s technology rather than its token value.

Polkadot 2.0 and SEC’s Shifting Stance

Another crucial factor influencing DOT’s future is the upcoming launch of Polkadot 2.0, a major network upgrade expected in Q1 of this year.

This upgrade aims to enhance the protocol’s scalability and developer accessibility, potentially increasing adoption and driving long-term growth.

An early testnet version is already available on the Kusama network, allowing developers to experiment with its new features.

The SEC’s stance on cryptocurrency ETFs is also evolving, particularly due to regulatory changes and leadership shifts.

The resignation of SEC Chair Gary Gensler on Jan. 20 has paved the way for renewed optimism in the crypto investment sector.

Gensler was known for his cautious approach to digital asset regulations, and his departure has coincided with a surge in ETF filings.

For instance, Osprey Funds and REX Shares recently filed for ETFs tracking meme coins like Dogecoin (DOGE), Official Trump (TRUMP), and Bonk (BONK).

Additionally, the SEC has granted initial approval for Bitwise Asset Management’s Bitcoin and Ethereum ETF, which combines exposure to both BTC and ETH in a single fund.

Meanwhile, 21Shares is also pushing its crypto ETF innovation with its proposal to integrate staking within Ethereum ETF.

The firm recently requested that the SEC allow the staking of Ethereum held by the ETF’s trust.

If approved, this could set a precedent for future ETFs incorporating staking rewards, adding a yield component for investors.

With regulatory dynamics shifting and asset managers doubling down on crypto ETF applications, this represents a key moment in the expanding institutionalization of digital assets.

Whether the SEC grants approval remains uncertain, but the growing momentum behind crypto ETFs indicates that regulated investment vehicles for a wider range of digital assets are becoming increasingly viable.

The post 21Shares Advances Polkadot ETF Plans with Updated SEC Filing appeared first on Cryptonews.

During the past 3 months, Polkadot was one of the main performers after gaining by 130%.  The price of DOT, one of the leading altcoins, down by 3.6% during the past 24 hours. This shows that it has maintained its go-dowm momentum despite other cryptocurrencies losing much within the period. Generally, DOT has benefited from the euphoria surrounding Trump’s victory and the prospect of a new SEC chairperson. At press time, trade DOT’s perpetual contract at $4.89 DOT/USDT on Gate.io. The graph below shows DOT’s current price outlook.

DOT  Weekly Price Chart- Gate.io

As observed on the graph, DOT is within a bullish trend which started on 26 November. One reason DOT is trending is the positive news and reviews it has been receiving since mid-November. For instance, the news surrounding Polkadot 2.0 has created much positive sentiment among DOT investors.

Analyst Predicts Sustained DOT Bullish Market

Apart from the existing bullish momentum some analysts have predicted that the altcoin’s buying pressure will likely increase in the future. Gate.io predicts that DOT may sustain its bullish outlook if its price remains above $8.60 DOT/USDT. The analyst anticipates it to retest this critical support level before rising towards its all-time high of $55, attained in 2021. His perception is that if the cryptocurrency maintains that level into March there will be a high likelihood of a sharp price spike during the month. DOT’s closest target in December is $12.61.

DOT Market Outlook

As hinted earlier, Polkadot is within a bullish run. The market anticipates the rally to continue until the end of the year. Several key indicators such as the moving averages also confirm that DOT is within a bullish run.

DOT Weekly Price Chart – Gate.io

Probably, one of the first things you notice when you look at the above image is the golden cross that formed on DOT’s weekly chart. The golden cross is formed when the 50-day EMA crosses above the 200-day EMA. No doubt, this is a bullish signal. Therefore, the market may expect its price to continue in its upward trajectory for the next few days or weeks. Another impressive thing is that the DOT trading volume has been very high during the past several days. That indicates the buyer’s appetite for the asset. The Bollinger Bands and the ADX also show that DOT is bullish.

As you see in the image above the Bollinger Bands shows much volatility and momentum as it is widening at the moment. Its upper band is at $9.839 while its lower boundary has a reading of $3.76. Therefore, if DOT breaks above the Bollinger Bands once more its price would be surging towards $10. Also, the ADX has a reading of 55.33 which indicates high volatility. When an asset has high volatility its price increases significantly if there is a rise in the buying activity.

However, it seems that DOT is forming a parabolic curve which shows a strong price rally. However, that may also have a danger of a sharp fall in its value should the buying pressure decrease and the selling momentum increase. The best scenario is to see the cryptocurrency getting into a sideways market. If that happens it may gather much more momentum for another price spike.

The Potential and Future of Polkadot

Polkadot is one blockchain that creates value for the crypto ecosystem through enhancing interoperability among different blockchains. Its main function is to transfer data and wealth among blockchains. For example, it enhances data sharing between independent blockchains such as Ethereum and bitcoin. Polkadot which was launched in August 2020 enhances a heterogeneous multi-chain architecture system. Due to its uniqueness many developers are interested in creating their blockchain networks on it. Apart from its functionalities, the blockchain is known for its speed, scalability and security.

Polkadot’s native cryptocurrency, DOT, has many functions within the ecosystem. First, DOT is the network’s governance token, a reason why it is in high demand. This also means that it has much significance now and in the future. Secondly, the network validators stake the token in order to verify transactions on the blockchain. This means that DOT has utility. More importantly, DOT is tradable on various exchanges that include Gate.io, Coinbase and Binance. For example, on Gate.io DOT is paired with Bitcoin, USDT and TRY.

As said earlier, the team is working on Polkadot 2.0  which includes the addition of several upgrades. Polkadot 2.0 will boost the network’s scalability and security. It will also improve the staking mechanisms which will likely attract more DOT investors. The recent surge in the DOT price indicates that many investors are interested in the cryptocurrency. Due to these developments some analysts have forecasted the DOT price to increase remarkably during the year. As an example, Toni Bitcoin has predicted that the DOT price may reach $15 DOT/USDT before 20 May 2025.  Considering the coin’s current value there is a high possibility that it may surge towards the mentioned amount within the cited period.