Polkadot (DOT) pumps 22% daily: what’s driving the rally and what’s next?

Can DOT Push Higher After Hitting a One-Month Peak?

Polkadot (DOT) is among the top performers today (February 26), up about 22%.

The coming halving and more

Polkadot’s native token, one of the top cryptocurrencies in 2021 when its price skyrocketed above $50, has fallen severely in recent months, crashing to a local low of $1.15 in early February.

However, it staged a strong comeback in the past day, with its valuation hitting a monthly high of around $1.74. Its market capitalization rose above $2.6 billion, making it the 36th largest cryptocurrency.

The broader market rebound, marked by Bitcoin (BTC) approaching $70,000 and Ethereum (ETH) reclaiming the psychological $2,000 level, seems to be the most likely catalyst pushing DOT’s price higher. However, some analysts argued that other factors could have contributed to the rebound.

Lark Davis, who has nearly 1.5 million followers on X, argued that the upcoming Polkadot halving could be such a reason. He said the event, scheduled for March 14, will reduce annual token issuance by 50%, claiming that “the scarcity narrative is driving strong bullish sentiment.”

Another potential driver, as noted by Davis, is the growing anticipation around potential spot DOT ETFs, which prominent companies like Grayscale and 21Shares have expressed interest in launching.

These products (if approved by regulators) will allow investors to gain exposure to Polkadot’s native cryptocurrency through investment accounts, without having to directly own the token. This simplified access could attract more market participants, while increased demand could lead to upward price pressure on the asset.

The regulatory environment in the US has shifted towards a more favorable attitude towards crypto products, with multiple spot ETFs being introduced in recent months. This indicates that a similar investment vehicle with DOT as the underlying token could also go live soon.

Davis didn’t stop there, offering a third possible reason for the asset’s recent resurgence. He suggested that DOT “broke above the daily 20 EMA and horizontal resistance around $1.40+, while firm support remained at $1.23, a setup that could have spurred momentum buyers.”

The following goals

The revival has naturally led to a new wave of enthusiasm among analysts and traders, some of whom believe DOT has more fuel left to chart further gains.

X user RACHEL CRYPTO predicted the price could rise to $1.80, while before that Crypto GVR existed in mind an increase to $2-$3 in the long run.

At the same time, the asset’s Relative Strength Index (RSI) should serve as a warning. The technical analysis tool measures the speed and magnitude of recent price changes and can help identify potential price reversals. It ranges from 0 to 100, with ratios below 30 indicating DOT is oversold and ready for a potential pump, while values ​​above 70 are interpreted as bearish territory. The RSI is currently around 73.