Following the overall performance of the crypto market, Polkadot’s DOT crypt currency has declined by 37% from the recent high of $6.86. It is currently trading at $4.44 per unit.
The great commotion that this project has caused in recent months has led it to position itself among the 7 largest in the ecosystem.
Polkadot’s platform facilitates transfers between different block chains. Regardless of the type of data or assets that are there, through the use of side chains.
Interoperability has been one of the biggest challenges of the blockchain, and after this chain to offer it with a great capacity, the investment and development interest has shot up in this chain, which is causing a rapid growth of its capitalization.
Some have come to classify this project as a good opponent for Ethereum.
But how much truth is there behind this? Currently, its situation is quite favorable. The development of different services using their network such as Sora, Alcalá, Mantra DAO, and Akropolis, and a very successful native DeFi protocol indicate that their growth is starting.
What is a sidechain in Blockchain?
Polkadot Stafi (DOT)
Without a doubt, one of the best things that has happened to DOT in the last few days is the launch of the Staking Stafi protocol. It managed to raise 205 million in the first stage, with a participation of 1767 addresses.
While Ethereum continues with a strongly congested network that generates high transaction fees, Polkadot has been taking advantage of the situation to gain ground, attracting investors that tend to be convinced that this project is a good substitute for ETH.
Advantages and disadvantages of decentralized staking
Despite the recent growth in the network share of this project, its price has been falling since the week just ended.
This scenario is just a product of Bitcoin Millionaire influence on the crypto market in general, so rather than thinking that there is negativism around Polkadot, the current behavior is caused by a collateral force.
Let’s see below where the price may be moving in the short term, by analyzing the graph of its price in a technical way.
Technical analysis of Polkadot
In the daily chart we can see how the EMA of 8 and the SMA of 18 crossed downwards, product of the break of several continuous supports, however this fall seems more a search of demand, than a solid change of trend.
Yesterday we observed DOT visiting and rejecting the demand zone around the $3.7 level, and although there are still not many signs that confirm that the decline is over, for those who trust in an intrinsic value of Polkadot, they may consider the current price as a reduction, and could start to encourage strong purchases.
The previous predominant force is bullish, so the above scenario is the most likely to happen in the short term.