Polkadot (DOT) Price Nears Breakout from Bearish Pattern, but Community Backlash Over Treasury Spending Can Hurt DOT

Polkadot (DOT) has been in the spotlight recently following the release of its 2024-H1 Treasury Report, detailing substantial expenditures on marketing

DOT price is on the verge of breaking out of a bearish technical pattern, while the community backlash over the latest Polkadot treasury report might hinder the token’s price action.

Key Points:

DOT price is yet to confirm a breakout from a bearish descending triangle pattern, which could see the Polkadot token drop towards $2.4.

The Polkadot community reacted strongly to the latest treasury report, which outlined a total spending of $86 million in the first half of 2024.

The large allocation of $37 million to marketing efforts, including a sponsorship deal with Inter Miami CF, sparked criticism.

Rising tenions between Polkadot and Manta Network over adoption and project bias also add to the community's concerns.

DOT Price Target At $2.4 If Bearish Setup Confirms

DOT price dropped over 85% from its all-time high of $55 in 2022. The massive sell-off formed a bearish technical pattern on theDOT/USD four-hour chart.

The descending triangle is a bearish continuation pattern that market analysts often observe closely. It features a downward-sloping upper trendline, which gradually reduces the price action's highs, and a flat lower trendline, which is a consistent support level the price finds difficult to break.

Moreover, the pattern suggests that selling pressure is intensifying, leading to successively weaker rallies. In this setup, the potential price target is typically gauged by the maximum height of the triangle at its widest point.

Hence, DOT price is yet to confirm a breakout from the descending triangle pattern. However, confirming the bearish setup might result in the DOT price dropping over 55% to reach the projected price target near $2.4.

Community Backlash Over Polkadot Treasury Might Hinder DOT breakout attempt

The latest Polkadot treasury report outlined a total spending of $86 million in the first half of 2024. While the treasury, which currently holds around $245 million, is expected to be depleted within two years at the current spending rate, other factors also add to the community’s concerns.

A large allocation of $37 million to marketing efforts, which includes a sponsorship deal with Inter Miami CF, sparked criticism within the Polkadot community. The sponsorship, part of a broader strategy to expand Polkadot's footprint in the mainstream, aims to leverage the soccer club's global appeal, especially through its star player Lionel Messi.

However, the strategy has faced pushback from some community members, who question the efficiency and necessity of such high-profile spending. Some crypto content creators praised the Inter Miami sponsorship as a strategic move, considering Messi's massive following.

At the same time, they highlighted the skepticism among the broader community and suggested prioritizing development and liquidity mining before spending on key opinion leaders (KOLs) or influencer marketing, which also received a portion of the treasury funds—$4.8 million.

Ignas, another crypto content creator, defended the use of influencers for Web3 outreach but suggested that development and liquidity mining should come first before spending on KOLs. He added that if influencers are used well, they can help spread the word about Polkadot, but it's important to focus on the right things first.

Meanwhile, crypto content creator Esther Jade praised the Inter Miami sponsorship, calling it a smart move to get Polkadot into the mainstream, while others remained skeptical about the high-profile spending and its necessity.

Tensions Rise As Manta Network Founder Accuses Polkadot Of Lack Of Adoption Drive

Victor Ji, the founder of Manta Network, further escalated tensions by accusing Polkadot of failing to drive meaningful adoption and exhibiting bias against Asian projects. Ji's comments follow an earlier discussion on Polkadot's subpar ecosystem revenues.

In a series of tweets on March 7th, Ji expressed dissatisfaction with Polkadot's adoption strategy, which he claimed had largely fizzled out after 2022. He asserted that despite collecting substantial fees from parachains, Polkadot had failed to use them effectively to expand its footprint.

Moreover, Ji highlighted a disparity in the treatment of projects based on their geographical location, alleging that Asian projects faced difficulties in obtaining parachain slots and encountered resistance from the community.

Highlighting the declining revenues in the Polkadot ecosystem, the report attributed the drop to a drastic reduction in network fees. The report stated that ecosystem revenues amounted to 12.5K DOT in the first half of 2024, marking a 57% decrease compared to the latter half of 2023.

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