Key Insights:
- Polkadot price rallied 40%, breaking inverse head and shoulders, hitting the $1.75 Fibonacci target.
- The March 14 halving slashes annual issuance 50%, from 120M to 55M tokens, creating scarcity.
- Open interest crashed from $120M to $60M, showing traders took profits before the supply cut.
Polkadot price surged 40% in recent days. The token rallied from lows around $1.20 to $1.30 up to $1.75. That broke an inverse head and shoulders pattern. The Fibonacci target sits at $1.81, close to where the price currently trades.
March 14, 2026, brings a major event. Polkadot’s first supply halving cuts annual issuance by 50%, from 120 million tokens down to 55 million. However, open interest in futures crashed from $120 million to $60 million. Traders took profits despite the upcoming catalyst.
Polkadot Price Eyes Fibonacci Level After Inverse H&S Breakout
The inverse head and shoulders pattern was completed recently. This technical setup forms over weeks or months. The left shoulder was created during earlier weakness. The head formed at the lowest point. The right shoulder was built as the price recovered. Breaking above the neckline confirms the pattern.
Polkadot price broke that neckline and rallied hard. The measured move from the pattern projects to $1.81. The current price, around $1.75, sits close to that target. The pattern worked exactly as technical analysis suggests it should. One of the reasons why Polkadot is on the trending tokens’ list.
However, patterns don’t guarantee continuation. Resistance exists at Fibonacci levels. The 0.618 retracement and other technical zones create selling pressure. Traders who entered early in the pattern formation are sitting on significant gains. Many have already exited. That’s visible in the derivatives data.
50% Supply Cut Ahead as $60M Longs Exit
March 14, 2026, is the “Pi Day Reset” for Polkadot. The network undergoes its first supply halving. Annual token issuance drops from approximately 120 million DOT to 55 million DOT. That’s a 50% to 53% reduction. The change introduces a hard cap of 2.1 billion total supply.
This shifts Polkadot from inflationary to less inflationary over time. Similar to Bitcoin halvings, which reduce new supply and historically drive prices higher. Market participants typically buy ahead of these events, front-running the scarcity narrative.
But open interest data shows something different happened here. Open interest in Polkadot futures peaked at $120 million on Feb. 25. It had dropped to $60 million by Feb. 26. That’s a 50% collapse. Long position holders closed their trades. They took profits.
Funding rates stayed mildly positive around 0.01%. That means longs were paying shorts a small fee, but the rate didn’t spike. This wasn’t a short squeeze.
The rally came from spot buying and early longs exiting rather than excessive leverage building. Healthy in some ways, but it also means the easiest gains may be made. Those who accumulated early have already sold. New buyers need fresh catalysts to push higher.
Polkadot Price Hidden Divergence Signals $1.43 Pullback
Technical analysis reveals hidden bearish divergence between Jan. 21 and Feb. 25, highlighted on the chart earlier. During that period, the Polkadot price made a lower high. But the Relative Strength Index made a higher high. That mismatch signals weakening momentum.
Hidden divergences are subtle. They don’t scream warnings like regular divergences. But they often come before pullbacks or consolidations. Buyers are trying harder, as shown by rising RSI. Yet they can’t push prices to new highs. Sellers meet every attempt with supply.
Critical support sits at $1.43. That’s where consolidation likely happens. DOT price needs to hold above this level to keep the pattern valid. A break below $1.43 weakens the bullish structure significantly. It would suggest the 40% rally was the full move. Nothing more is coming.
The bigger danger is losing the 0.618 Fibonacci level. Drop below that, and the pattern breaks completely. That is when the Polkadot price could fall back toward $1.20 or lower. Year-to-date, Polkadot is still down significantly from its highs.
The March 14 halving remains a bullish catalyst. But if traders already exited their longs at $1.75, who’s left to buy? New participants need to enter. Otherwise, the supply cut happens without Polkadot price following higher.