Polkadot crashes to key price: here’s why it may rebound 500%

Polkadot price crashed to a key level this week as it continued to underperform other popular layer-1 coins like Solana and Mantra.

Polkadot (DOT) dropped to a low of $3.53 this week, erasing all gains made since September last year.

Two potential catalysts may push the coin higher in the coming months. First, developers will launch the Polkadot 2.0 upgrade, expected to be the most significant update since its inception in 2016.

Polkadot 2.0 will follow the recent introduction of asynchronous backing, which accelerated transaction confirmation time and capacity. The upgrade will introduce two key features: agile coretime and elastic scaling.

Agile coretime simplifies developer onboarding by providing on-demand access to affordable blockspace, similar to parallel CPUs.

Elastic scaling will refine Polkadot’s core structure, enabling parachains to increase block production and transaction capacity.

Polkadot will also introduce the Joint-Accumulate Machine,which will replace the relay chain. JAM will function as a rollup chain, operating transactionlessly by focusing on guarantees, assurances, judgments, preimages, and tickets.

According to Polkadot, this launch is expected in early 2025. A key benefit is that developers will be able to build on Polkadot similarly to Ethereum. The current version of Polkadot requires parachain developers to go through an auction process, which has discouraged adoption.

Polkadot has also allocated funds to support its ecosystem ahead of the JAM rollout. This includes the $155 million Polkadot Treasury, a $45 million JAM Implementer Prize, and a $30 million Decentralized Futures Program.

Polkadot price technical analysis

The other potential catalyst for Polkadot is its technical indicators. The weekly chart shows that DOT has remained in a tight range since 2022, struggling to break below the $3.53 support level or above the $11.85 resistance.

This price action may indicate accumulation by institutional investors. The accumulation and distribution indicator has been rising recently, reinforcing this possibility.

DOT has also formed a triple-bottom pattern with a neckline at $11.85, a commonly recognized bullish reversal pattern.

Therefore, DOT is likely to stage a strong comeback, with a key target at $30—the 50% Fibonacci retracement level—representing a potential 500% surge from current levels. A rally to this level will be confirmed if the price breaks above the 23.6% retracement at $11.85 and the 38.2% retracement at $23.38.