3 reasons why Polkadot price may stage an XRP-like surge

Polkadot has underperformed its closest peers like Solana, Binance Coin, and Tron as it remained in a three-year consolidation between $3.85 and $11.7.

Polkadot’s (DOT) price action has seen it drop in crypto rankings, moving from a top ten coin in 2021 to the 22nd biggest one. It has been overtaken by newer cryptocurrencies like Hyperliquid (HYPE), Sui (SUI), and Toncoin (TON).

Still, there are three key reasons why the DOT price may exit the three-year consolidation soon just like Ripple (XRP) did.

Spot Polkadot ETF approval potential

One potential reason why the Polkadot price may soon surge is that the Securities and Exchange Commission may soon approve a spot DOT ETF. 21Shares filed for that fund earlier this month 

The SEC has hinted that it will be a more friendly agency to the cryptocurrency industry under Donald Trump. One way it could demonstrate this is to allow spot ETFs faster, which will expose them to Wall Street investors.

Most cryptocurrencies, like XRP and Litecoin, which have higher odds of ETF approval, have surged in the past few weeks. Polkadot could join the rally as it remains near its all-time low.

Polkadot JAM upgrade

The other reason why the Polkadot price could surge is the migration to the Joint-Accumulate Machine or JAM, which is part of the Polkadot 2.0. JAM hopes to combine the existing strengths of Polkadot and those of Ethereum, and then replace the Relay Chain in the future. 

JAM also hopes to solve the challenges that have affected Polkadot in the past. The notable ones are the high costs of making a parachain, the fact that these parachains are isolated and that joining parachain auctions is limited and expensive.

Pokadot 2.0 will allow developers to build applications directly without going through the parachain process. These developers will also take advantage of the existing Polkadot features like high bandwidth, its resilience as measures by the Nakamoto coefficient, and its speed.

Polkadot can handle over 140,000 transactions per second, much higher than Solana’s 3,000.

Polkadot price has strong technicals

Polkadot also has strong technicals that may push its price higher over time. The chart above shows that DOT has remained between the support at $3.85 and resistance at $11.71 in the last three years. It recently retested the lowest side of this channel.

This consolidation mirrors what happened to XRP, a token that has surged lately. It is also a sign of accumulation, the initial stage of the Wyckoff Theory. Accumulation is usually followed by the markup phase, which is characterized by higher demand than supply. 

A strong breakout above the upper side of the channel will signal more gains ahead, with the initial target being at $23.5, the 38.2% retracement level that is about 365% above the current level.