Polkadot price could be on the verge of a strong surge. It continues to consolidate at a crucial support level and its staking inflows are increasing. On Thursday, the DOT token traded at $4.18, slightly up from its year-to-date low of $3.15. This article explains why the coin may surge soon.
Polkadot Price May Surge as Staking Inflows Jump
One of the top catalysts for the DOT price is the strong demand from long-term investors, who are interested in its double-digit yield.
StakingRewards data indicate that the coin boasts a staking yield of 11.2%, surpassing that of top tokens such as Solana, Sui, and Ethereum.
The data also shows that $3.57 billion worth of Polkadot is staked, representing a 54% staking ratio. This ratio is also higher than that of top tokens, which is a good thing, as it indicates that holders are committed to the long term.
Polkadot has continued to experience strong staking inflows, even as its price has remained relatively stable over the past few months. At the current price, 11 million DOT tokens, worth $45 million, have been staked.
These stakers hope that the Polkadot price will bounce back, helped by its strong fundamentals. Most notably, development activity in the network has jumped in the past few days. As the chart below shows, the number of GitHub commits has increased from a low of 31 in April to 50 today.
The other highly bullish catalyst for the DOT price is the upcoming launch of elastic scaling as part of its Polkadot 2.0 upgrade, a feature that allows parachains to dynamically utilize multiple cores or computational resources within the Relay Chain to process multiple blocks.
Elastic scaling, when implemented, will be a crucial part of the network as it will help boost its speed and increase throughput. In Polkadot 1.0, parachains were limited to one block per Relay Chain block.
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DOT Price Technical Analysis
The three-day chart shows that the coin has found strong support at the $3.5 level. It has failed to drop below that price at least three times since October 2023. Even in April, as most altcoins plunged, the DOT price held above that level, signifying short-seller caution below $3.5.
The price action also indicates that the token has formed a triple-bottom pattern, with its resistance level, or neckline, at $11.5. Indications have also emerged of forming a bullish divergence pattern as the two lines of the Percentage Price Oscillator have pointed upwards.
Therefore, the price will likely continue rising as bulls target the psychological point at $10, which is about 140% above the current level. This bullish outlook will be invalidated if bears prevail and push it below the support at $3.5.
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