The crypto market suffered a severe knock over the past weeks, with Bitcoin ($BTC) briefly dropping to $54,000. Altcoins have followed suit, with Polkadot, Solana, and Ethereum losing ground.
The cryptocurrency market has experienced severe difficulties in recent weeks, with Bitcoin and alts reaching their recent lows. Amid harsh market conditions, Polkadot attracted criticism for its early 2024 spending. Market conditions, coupled with concerns over the Polkadot Treasury’s high expenditure, resulted in Polkadot ($DOT) dropping 16% over the past month.
Polkadot Rebounds
Last week, Polkadot ($DOT) recovered some of what it had lost in the week before trade above its crucial $6 mark. After ending Sunday’s trading session above its critical price, $DOT encountered considerable selling pressure. Despite the significant pressure, $DOT maintained its upward trajectory, rising to $6.52 on Tuesday. $DOT, however, encountered increased selling pressure, resulting in $DOT dropping by nearly 7% on Wednesday, which ended the session at just above $6.
Thursday saw sellers continue their hold over the market, resulting in $DOT declining by 8.57%. Thursday’s session forced $DOT below $6, eventually settling at $5.55.
On Friday, $DOT lost its support at $5.50, briefly touching $4.92. Strong buying demand at the recent lows pushed $DOT back above $5. $DOT finally settled Friday’s session at $5.7. Buyers’ demand continued throughout Saturday’s session, driving $DOT past its $6 level, eventually ending the session at $6.20.
$DOT currently trades at $6.08, down 0.62% on the 24-hour chart.
$DOT Down 16% Over 30 Days
Considering the overall market downturn, a decline in $DOT was expected. In addition to market contagion, Polkadot received heavy criticism over its high expenditure. The Polkadot community raised their concerns following a Treasury report which claims that the project would only have two years’ worth of budget at the current spending rate.
Tommi Enenkel, head ambassador for Polkadot’s treasury, commented in the report:
“At the current rate of spending, the Treasury has about two years of runway left, although the volatile nature of crypto-denominated treasuries makes it hard to predict with confidence.”
Adding;
“This has sparked discussions ranging from a stricter budgeting approach to a change in the inflation parameters of the system.”
While the report is concerning, Polkadot is unlikely to run out of funds after spending the $245 million it holds, given that around 7% of staking rewards are sent to the treasury.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
