Polkadot (DOT) Price Prediction: Rare Chart Pattern Points to a Strong Rebound

Polkadot (DOT), a leading layer-1 network with a market cap of $11 billion and a staking yield of 12%, has underperformed large-cap cryptocurrencies

Polkadot (DOT) has lagged behind the top-tier large-cap cryptocurrencies in terms of performance over the past few years. This performance can be attributed to the fact that other layer-1 networks, such as Solana (SOL) and Ethereum (ETH), have more prominent ecosystems within their networks.

For instance, Solana is widely recognized for its meme coins and popular decentralized exchange networks, such as Raydium and Orca, which are integrated within its ecosystem.

Meanwhile, Ethereum is known for its vast ecosystem, which includes decentralized applications, such as AAVE and Compound, as well as the numerous ERC tokens that rely on its technology.

Having said that, Polkadot is working to change this performance as part of the Polkadot 2.0 initiative, which aims to scale the network for a wider range of use cases. Some of the initiatives that are being undertaken include upgrading its asset hub to support Ethereum Virtual Machine and Solidity-based smart contracts.

Furthermore, Polkadot will be introducing elastic scaling, which will enable developers to adjust throughput dynamically, and a unified address format. Other key upgrades that are planned for this year include using DOT as the universal fee token across all parachains.

Through these initiatives, the developers hope to make Polkadot the go-to blockchain for developers in various industries, such as gaming and decentralized finance. There are already some signs that these initiatives are starting to deliver results.

For example, the amount of Tether (USDT) and USD Coin (USDC) within its ecosystem’s parachains has grown by 400% over the past 12 months, now amounting to more than $114 million.

Being an American crypto project also stands to benefit Polkadot from the Trump administration initiatives. For instance, it could be one of the projects to receive a spot ETF approval. Trump has indicated that he might be open to including some American crypto projects in a US reserve.

Polkadot price technical analysis: A double-bottom and falling wedge pattern forming on the daily chart

On the daily chart, we can see that the DOT price has formed two chart patterns on the daily chart, which could drive it higher in the near term. Firstly, it has formed a double-bottom pattern at $6, which is a widely recognized formation that often leads to bullish breakouts.

Secondly, Polkadot has also formed a falling wedge pattern, which is characterized by two descending and converging trendlines. Notably, the coin has moved above the 100-day moving average, which is a signal that the bulls are gaining control.

As a result, we can expect the coin to experience a bullish breakout, with the next key level to watch being $11.65, which was its highest swing on Dec. 4 and is 60% above the current level.