A little over a month ago, in the middle of the second stage of the Polkadot Blockchain Academy, we talked with Ezio Rojas, Polkadot’s community manager for Latin America, about polkadot’s prospects for 2023, and he revealed that this year was important for the blockchain protocol for three events that they hoped to celebrate, these were: the launch of OpenGov in Polkadot, to achieve a greater degree of decentralization for the network; the implementation of “asynchronous backing” or asynchronous backup, to help optimize the consensus between the parachains and the Relay Chain and encourage Polkadot to process “more than a million transactions per second”; and the implementation of XCMv3, to achieve greater interoperability within the Polkadot ecosystem by bringing NFT transfers, as well as the launch of decentralized bridges between Polkadot and other ecosystems.
On this occasion, and in view of the recent market movements, the current price of DOT has been analyzed, the cryptocurrency of the network that registers the twelfth position in the Coinmarketcap ranking, with a capitalization of 6.5 billion dollars. , that is to say about 9.82 billion less than exactly one year ago.
Source: Coinmarketcap
Likewise, first of all, it is necessary to consider that, according to previous analyses, The behavior of the DOT price replicates in a very similar way the movements of the Bitcoin price, which right now is, at the time of writing this note, at USD 22,448.
That being said, also it is important to note the current market sentiment for DOT, which according to the cfgi.io fear and greed index, is at 44%, neutral level, according to the explanation of this index. In other words, it can be interpreted that DOT investors are waiting for the next movement of BTC, since it is moving in a neutral range as well. This shows that Bitcoin determines or guides the course of the rest of the crypto assets in the market.
Source: cfgi.io
DOT Technical Analysis
In this way, for the purposes of technical analysis, for the DOT price we can mention that in the monthly graph we observe a clear decrease in the volume of trade since May 2022, a month before the price settled in a fixed range of $4-8.
Source: Tradingview DOT 1M
As for the weekly timing, we see that the noise from the moving averages (barely forming) is quite open, with wide gaps as of today. In this sense, for the price position, they have it in a formation close to a contraction, since the 20-week moving average (green) holds the price and marks a support around USD 6, and, on the other hand, there is the 50-week moving average (blue) marking resistance at the $8 level.
Source: Tradingview DOT 1S
Evidently, By carrying out a backtesting of the crypto asset, we can show that the marked line, around USD 6, represents key support for the asset price in the last year. This also shows that, in any case, it is really complicated, but not impossible (and even more so if you need liquidity), for the price to drop much more from there, since investors, due to the confidence it represents, are defending that price zone from January.
About the daily chart, the noise of the moving averages is less harmonious; however, currently it can be seen that the bullish formation of moving averages (20,50,100,200) is close. It is only missing that the 100-day average (green) settles on the 200-day average (fuchsia), as can be seen, both are delimiting the price area of 6 USD in a lower and lower range.
Source: Tradingview DOT 1D
This, without a doubt, is positive for the price of the crypto asset in the short term, since in the event of a fall, the evidence that this area is safe for the price is greater, since it has the 100-day average as support at USD 5.7. .
On the other hand, analyzing with a broader focus the daily graph of DOT, and drawing a channel, we can see that the price is currently holding at the lower limit of what is clearly a bullish channel where it is verified that its resistance, target, or possibly profit area for traders is around 8 USD, as shown Observe in the following graph where it is also shown that this area has already been important for decision-making by investors.
Source: Tradingview DOT 1D
Will DOT reach $100?
About whether the DOT price could reach USD100, really the answer has a very speculative origin Based on the different variables that this cryptocurrency carries with it, especially due to its total supply that tends to be infinite, this therefore makes it very difficult for the price to increase to much higher levels if a considerable amount of money does not enter. money.
In the DOT registry, its highest price level was at USD 55 at the end of 2021 with the bull run; however, the amount of coins in circulation and the total supply was less than now (1,163,430,203 DOT/ 1,289,853,873), therefore, a large amount of capital will be necessary to raise the price to that target in a term that will become increasingly difficult to measure as the infinite total supply increasesand even without considering the important price zones that would resist or influence market sentiment, as would happen with the ATH.
Saying, To get an idea of how utopian it is for now to reach 100 USD, according to CoinPerspective, considering the current total supply, the market capitalization would have to reach 129.0 billion dollars, that is, register a 16 times increase what is currently available.
Source: The Coinperspective
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