The winds of change are swirling around Polkadot (DOT). After a month-long slump that mirrored a broader cryptocurrency market downturn, DOT finds itself at a critical juncture.

Technical indicators hint at a bullish reversal, with some analysts predicting a significant price surge for the interoperable blockchain darling. However, a recent spending spree by the Polkadot Foundation has cast a shadow of doubt, leaving the community divided.

Falling Wedge Hints At Breakout, Analysts Eye $9 Target

As technical analysis presents a potentially hopeful picture, DOT holders’ hope wavers. On the daily chart, a “falling wedge” pattern—historically a bullish indication—has been observed. This pattern suggests a price squeeze between converging trendlines, often culminating in a sharp breakout.

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Renowned analyst Jonathan Carter pinpoints $6.50 as the key resistance level. A decisive break above this point could trigger a surge in buying pressure, propelling DOT towards his projected profit targets of $7.75 and even $9.00.

#DOT

Polkadot forming falling wedge on daily timeframe💁‍♂️

Key resistance at $6.5 – need to break for bullish structure☝️

Consider setting profit targets at $7.75 and $9.00 levels🎯 pic.twitter.com/OwPVFaPZyD

— Jonathan Carter (@JohncyCrypto) July 3, 2024

The falling wedge pattern and increasing trading volume suggest a potential breakout is imminent. A successful breach of the $6.50 resistance could signal a significant shift in market sentiment, paving the way for a substantial price increase.

Buoying this optimism is the Relative Strength Index (RSI), currently hovering around 48.65. This neutral level indicates that DOT is neither overbought nor oversold, leaving room for further upward momentum.

Polkadot Foundation’s Spending Spree

However, a recent spending spree by the Polkadot Foundation has injected a dose of skepticism into the bullish narrative. Earlier this year, the Foundation burned through a staggering $87 million, leaving its coffers with a significantly reduced balance.

The breakdown reveals $36.7 million allocated for advertising and events, $15 million for trading platform incentives, and $23 million for development. While the Foundation maintains these investments are crucial for boosting network visibility and adoption, community members are not convinced.

Many point out that despite the hefty spending, Polkadot continues to lag behind competitors like Ethereum and Solana in key metrics like network activity, developer engagement, and total value locked (TVL).

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The spending seems excessive, especially considering the lack of tangible results, some community members on the Polkadot forum said. The blockchain needs to see a better return on investment before the Foundation throws more money at marketing campaigns, they said.

Will Spending Concerns Spook Investors?

The coming days will be crucial for DOT. If the technical indicators hold true and the price breaks above $6.50, a significant rally could be in the cards.

However, the community’s concerns about the Foundation’s spending habits cannot be ignored. If these concerns translate into a broader sell-off, the potential breakout might fizzle.

Featured image from Shutterstock, chart from TradingView

A closely followed crypto strategist and trader is revealing his price targets for Bitcoin (BTC) and two altcoin projects.

In a new strategy session, analyst Jason Pizzino tells his 329,000 YouTube subscribers that based on the average true range (ATR) indicator Bitcoin could soon break through key price target resistance levels.

The ATR indicator measures volatility by showing an asset’s trading range over a specified period.

“You can see the dying off here of the average true range of the bar. Previous cycles, look what happened. Average true range picks up, dies off, dies off, dies off, and then you start to get a higher low form and by that stage, you’re really a decent way from the stealth zone.”

According to the analyst, Bitcoin has historically made “stealth moves” to the upside when the ATR indicator reaches a local low and price continues to consolidate or puts in higher lows.

The analyst’s key price targets to the upside include $63,300 on the daily chart, $65,200 on the weekly chart and $72,000 on the monthly chart.

Bitcoin is trading for $60,176 at time of writing, down nearly 3% in the last 24 hours.

Next up, the analyst believes that Ethereum (ETH) competitor Solana (SOL) will move toward its current cycle top.

“With the higher lows and now trying to push higher above the 50% at $137. Next target on the weekly chart is $165. And then we go towards $190, $210. So $190 is above these tops. Then $210 is the current top for Solana. So it’s on its way. It hasn’t got those longer-term time frames confirmed yet, and those longer terms are the weeklies.”

Solana is trading for $141 at time of writing, down more than 8% in the last 24 hours.

Lastly, the analyst predicts that Render (RNDR), the graphics processing unit (GPU) rendering blockchain, will reclaim a double-digit value.

“Now, what do we need to see until it gets there? Obviously higher lows, and that would happen throughout this next couple of months, maybe even up to four months as we get to that [US presidential] election… If I keep seeing higher lows, it’s not going to stop me from getting into the market if it breaks out through that period.”

Render is trading for $7.04 at time of writing, down 7.7% in the last 24 hours.

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Ethereum and other altcoins have tumbled to lows not recorded in several weeks. This bearish outlook was also recorded in Bitcoin (BTC) and other decentralized finance (DeFi) tokens. Ethereum price has taken steps back wiping out previously recorded gains this week. A major reason for the market decline is a fall in sentiments with many pointing to major market corrections. 

The total crypto market fell to $2.11 trillion, a 4.8% decline in the last 24 hours. Meanwhile, several altcoins notched wider losses today deepening the negative sentiments. The drop in the ETH price also coincides with lower on-chain numbers and a transfer of assets to centralized exchanges which signals potential sales.

Ethereum Price Nears $3K

This year, Ethereum and other crypto assets surged to new highs amid the approval of spot Bitcoin ETFs in the United States. Despite the previous price gains and institutional inflows, massive sell-offs recorded in recent times have deepened sentiments. Ethereum trades at $3,075, a 7% drop in the last 24 hours. Weekly losses pierced double digits at 11% while monthly figures topped 19% in the red zone.

These outflows have sparked similar numbers in other altcoins. ETH’s market cap tanked to $367 billion while daily trading volume is over $20 billion. This year came with projections of sustained growth above $4k but plummeting price now sees ETH moving near $3k. The drop in crypto assets might force prices lower although many holders believe a rebound might be on the cards. 

Altcoins Are Sinking

Like most commentators opine, Ethereum price can surge with positive mainstream factors. The listing of ETH ETFs can lead to a jump in the asset’s price. The recent slump has also affected altcoin prices with Solana trading below $130 and $126 and Ripple plunging over 8% in the last 24 hours. Toncoin and Cardano were also down today with larger numbers posted by meme coins.

Also Read: End of The Road for Meme Coins? Dogecoin Takes Heavy Losses 

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David is a finance news contributor with 4 years of experience in Blockchain Technology and Cryptocurrencies. He is interested in learning about emerging technologies and has an eye for breaking news. Staying updated with trends, David reported in several niches including regulation, partnerships, crypto assets, stocks, NFTs, etc. Away from the financial markets, David goes cycling and horse riding.

The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.