DOT prices rallied by 12% in the last 24 hours after Grayscale’s application for a Polkadot ETF with the SEC.
However, the trading volume has been shrinking and the ETF buzz wasn’t strong enough to help it climb above $5.
On Tuesday, Feb. 25, Grayscale Investments applied a 19-4b rules change with the SEC.
The proposal was made through NASDAQ and if approved, it would result in the listing and trading of the Grayscale Polkadot Trust on the exchange.
This move is part of Grayscale’s broader strategy to expand its crypto ETF offerings, following similar proposals for Cardano and XRP funds.
Following the news, DOT prices rallied by more than 12% from the low of $4.30 to the intraday high of $4.90.
Interestingly though its daily trading volumes have shrunk by 32% in the last 24 hours to $299 Million.
Polkadot’s Varying Reaction to ETF News
It is worth noting that this isn’t the first time a Polkadot ETF has been filed with the SEC. On Jan. 31, 21Shares filed an application with the SEC to launch a spot Polkadot ETF.
Interestingly, the market didn’t react as positively to the news. Any bullish momentum that could have been gained from here ws quickly swallowed by the tariff triggered market crash.
DOT Struggles to Break Resistance
Despite the ETF buzz, Polkadot is still struggling below the key resistance level of $4.90.
For close to three months, DOT prices have been on a downtrend with its chart revealing that it is stuck on a descending triangle pattern, which signals a sustained downward price action.
If it sustains the current price action, it is possible that it will eventually crash below the key support level of $4.30 and possibly head to the November 2024 lows of $3.70.
But if the market rebound, there is a chance it will scale above the $5 resistance level.
Over the long term, forecasters and analysts are confident that DOT will rebound and resume the journey back to the ATH of $55, possibly breaking above $15 before year end.
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