Polkadot Hits Key Resistance as DAO Caps DOT Supply
Polkadot’s (DOT) price action is reaching a critical point, testing a meaningful resistance level around $4.50. The cryptocurrency is valued at $4.37, showing a weekly gain of 8%. However, it remains quite far from its 2021 peak, down by 92%. Trading volume and derivatives activity have also cooled down, suggesting less speculation.
A major progress affecting DOT came as the Polkadot Decentralized Autonomous Organization (DAO) passed Referendum 1710, setting a cap on DOT’s total supply at 2.1 billion. Previously,about 120 million new DOT were minted annually,with no limit.
- The new plan reduces annual supply growth and aims to reach a cap of 2 billion by 2040.
- This marks a shift towards greater predictability and scarcity for a previously inflationary asset.
The referendum’s approval reflects a community push for better financial controls. Gavin Wood, CEO of Parity Technologies, views this as part of Polkadot’s preparation for its upcoming 2.0 upgrade this month.
In terms of price analysis, despite bullish signs like a positive MACD and supportive moving averages, caution is advised due to potential pullbacks. The $4.00 level is a crucial support zone. If price breaks above $4.50, it could aim for $4.80 or even $5.00.Conversely, sellers dominating the scene might see the price dip to $3.80 or $4.00.
