In a stunning twist, Polkadot, which once amassed a staggering $500 million in funding, now faces dire straits as it grapples with a sharp decline in user engagement and developer interest.

Since hitting its peak of $55 in November 2021, DOT's value has plummeted a staggering 96%, revealing a concerning trend as on-chain demand waned almost entirely. While the broader cryptocurrency market has thrived with rising adoption, Polkadot has taken a sharp detour toward decay.

The collapse of Polkadot's network usage and price performances has reignited conversations regarding its long-term viability. Market analyst Nonzee has gone so far as to declare Polkadot "dead," pointing to sharply declining usage metrics and an ecosystem in clear disarray.

The Rise and Stumble of Polkadot's Ambitious Vision

With grand aspirations to surpass Ethereum as the leading platform for developers, Polkadot made headlines with its $500 million fundraising event. However, excitement waned swiftly after the launch of Parachains, causing real user engagement to plateau.

As of 2025, daily active users across major chains fell to a mere 5,000, showcasing a stark plunge in developer interest—from 2,400 to just 1,000.

Capital Flees as Activity Hits the Ground

As network usage dwindled, fresh capital dried up, and existing investors began to abandon ship. Trading volumes for DOT dropped dramatically, from $39 billion to just $5 billion, indicating an alarming reduction in on-chain activity.

Revenue has similarly evaporated, with Polkadot generating a meager $462 and struggling to surpass the $1,000 mark for two consecutive months—a warning sign for what was once hailed as a foundational component of the blockchain infrastructure.

A Further Descent into Irrelevance?

As DOT continues to decline, other cryptocurrencies are making strides, leaving investors wary of diving into a sinking ship. The analysis from AMBCrypto reveals unfavorable market conditions, suggesting DOT may be poised for even greater declines.

Currently trading at $3.3, DOT has seen a drop of 26.8% over the last month and a staggering 47.1% in the past year. With Relative Strength Index (RSI) metrics nearing oversold levels, ongoing sell-side pressure could drive DOT down to critical support levels of $3.0 and possibly even $2.8.

Can DOT Bounce Back?

Nonetheless, hope is not entirely lost for DOT. If sell pressure relaxes, there may be an opportunity for a rebound toward the $3.6 resistance. However, if the price dips below $2.6, the narrative of Polkadot as a 'death chain' may become more than just a harsh critique.

As the clock ticks, the need for buyers to step in becomes increasingly urgent to stave off further potential losses and revive Polkadot's fate.