Polkadot (DOT) Price Pulls Back After 30% Surge as Market Awaits SEC ETF Decision

Key Takeaways

• DOT fell below $5 after a 30% rally, with resistance near $5.30 halting momentum and triggering a pullback to $4.82.
• The altcoin’s short-term performance may depend on the upcoming SEC decisions on Polkadot ETF applications.
• The 4-hour chart shows DOT below the Ichimoku Cloud, suggesting growing downside risk toward $4.45 or lower.

DOT, the native token of layer-0 blockchain Polkadot, has dropped below $5. This development comes days after Polkadot’s price experienced a 30% increase, driving it to its highest level since Feb. 2.

Interestingly, the pullback also happened as the crypto market awaits a key regulatory decision: whether the U.S. Securities and Exchange Commission (SEC) will approve, delay, or reject pending applications for a Polkadot exchange-traded fund (ETF).

The SEC verdict could impact DOT’s price action outside of the technical outlook. As the decision nears, here is what could be next for the altcoin.

DOT Rally Eases After Breakout

According to the daily chart, Polkadot’s price surged to $5.30 after the cryptocurrency broke out of a falling wedge. The falling wedge is a bullish pattern characterized by two downward trendlines.

The upper trendline represents resistance as the price hits lower highs. The lower trendline, on the other hand, shows lower lows, indicating support.

For DOT, the breakout happened as the trendlines narrowed and buying pressure increased, as shown by the Chaikin Money Flow (CMF).

However, Polkadot’s price has since slipped to $4.82, due to the strong resistance near $5.30.

The recent decline in the CMF reading indicates that accumulation is fading, contributing to the pullback. Due to this position, DOT’s price may continue to slide, with a risk of breaching the key support level at $4.45.

ETF Verdict Remains Key

Beyond the technical setup, Polkadot’s short-term outlook also hinges on the SEC’s upcoming decision regarding multiple ETF applications. As CCN reported some time ago, asset manager Grayscale had filed for a spot Polkadot ETF with the decision to be made on June 11.

21Shares faces a similar timeline, with its SEC decision scheduled for June 24. However, regulatory approval remains uncertain, especially after the SEC postponed rulings on Solana (SOL) and Litecoin (LTC) ETF applications.

If approved, Polkadot’s price could see a notable rally as demand for the altcoin might increase.. However, a delay could extend the downward pressure on DOT’s price.

DOT Price Analysis: Still Under Pressure

In terms of its short-term outlook,  the 4-hour chart shows that DOT’s recent decline has pushed the price below the Ichimoku Cloud. Typically, the trend is bullish when the price is above the cloud.

The cryptocurrency’s market value might have more legs to run in that case. But this current position indicates that resistance has outpowered support.

Hence, DOT might experience an extended decline. In addition to that, the Relative Strength Index (RSI) has dropped below the neutral point, indicating bearish momentum around the Polkadot coin.

If this trend continues, DOT’s price risks falling below $4. However, if the cryptocurrency breaks above the Ichimoku cloud and the RSI reading jumps, a bullish reversal could send the altcoin in the $6 direction.