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The cryptocurrency markets have taken a serious hit over the past few weeks, with Bitcoin ($BTC) briefly dropping to $54,000. Altcoins have followed suit, with Polkadot, Solana, and Ethereum losing ground.
The cryptocurrency market has been going through some serious trouble in recent weeks, with Bitcoin and altcoins hitting recent lows. Amid the harsh market conditions, Polkadot has come under fire for its spending in early 2024. Polkadot ($DOT) has fallen 16% in the past month due to concerns over the high spending of Polkadot’s treasury, as well as market conditions.
Polkadot rebound
Last week, Polkadot ($DOT) recovered some of the losses it had in the previous week, breaking above the important $6 mark. After closing Sunday’s trading session above the important price, $DOT faced significant selling pressure. Despite the significant pressure, $DOT maintained its upward trajectory, rising to $6.52 on Tuesday. However, $DOT faced increasing selling pressure, and on Wednesday, $DOT fell nearly 7%, closing the session just above $6.
On Thursday, $DOT fell 8.57% as sellers continued to dominate the market. During the Thursday session, $DOT fell below $6, eventually settling at $5.55.
On Friday, $DOT lost support at $5.50 and briefly reached $4.92. Strong buying demand from the recent lows pushed $DOT back above $5. $DOT finally closed Friday’s session at $5.7. Buying demand continued throughout Saturday’s session, pushing $DOT above the $6 level and eventually closing the session at $6.20.
$DOT is currently trading at $6.08, down 0.62% on the 24-hour chart.
$DOT down 16% in 30 days
Given the overall market downturn, a drop in $DOT was expected. In addition to market contagion, Polkadot has received a lot of criticism for its high spending. The Polkadot community has expressed concerns following a Treasury report that claims the project will only have two years’ worth of funding at its current spending rate.
Polkadot Treasury Chief Ambassador Tommi Enenkel noted in the report:
“At the current pace of spending, the Treasury has about two years to play out, but the volatility of Treasury bonds denominated in cryptocurrencies makes it difficult to predict with confidence.”
adding;
“This has sparked discussions ranging from a more stringent budget approach to changing the system's inflation parameters.”
The report is concerning, but considering that around 7% of staking rewards go to the treasury, it is unlikely that Polkadot will run out of funds after spending its $245 million holdings.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.
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