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20% Price Drop Follows $87 Million Spending Outrage

20% Price Drop Follows $87 Million Spending Outrage

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.

Source: Coingecko

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.

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.

Source: Polkadot Foundation
Polkadot is currently trading at $5.39. Chart: TradingView

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…

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