How Polkadot [DOT] plans to shoot for the stars with this ‘Stellar’ deal
- Polkadot secured yet another important partnership with Stellar to boost liquidity.
- DOT saw a short-term breakout but it might be short-lived as the price approaches another sell zone.
The Polkadot [DOT] network, on 28 March, announced a major partnership with the Stellar network as it planned to harness more liquidity. According to the announcement, the two networks will connect to each other through the Spacewalk bridge. The latter is a new development from one of Polkadot’s parachains, called Pendulum Chain.
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Payments specialist @StellarOrg is connecting to Polkadot via the new Spacewalk bridge, built by parachain @pendulum_chain, enabling the smooth and seamless transfer of stable assets between the two ecosystems.
Find out more: https://t.co/qoPmN2en9B
— Polkadot (@Polkadot) March 28, 2023
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This partnership will facilitate the smooth flow of stable assets across the two networks. The strategic agreement comes amid liquidity concerns following the pressure that stablecoins have been facing. Polkadot’s announcement may have also spurred the upsurge in the network’s development activity in the last 24 hours.
The focus on stable assets is by no means a coincidence. Some blockchain networks have unlocked robust value through their heavy focus on providing access to stablecoins. The TRON [TRX] network is one such example. Supporting the flow of stablecoins may unlock more liquidity for the Polkadot network.
DOT bulls push out of short-term range
At press time, DOT was showing signs of relative strength and a potential breakout. Its four-hour chart revealed that DOT’s price had been trading within a descending range for the last 11 days or so. Nevertheless, bulls have dominated in the last 48 hours, leading to a breakout from its descending resistance.
The higher relative strength is evident by the RSI’s push above the 50% level. DOT’s money flow indicator confirmed that there were significant inflows into the cryptocurrency this week.
Despite this upside, DOT’s price might contend with some resistance near the $6.35 price level, which interacted with the 50-day MA. Its $6.25 press time price meant that DOT was fast approaching the resistance level.
Realistic or not, here’s Polkadot’s market cap in BTC’s terms
The possibility of a bearish outcome is further backed by the drop in investor consensus as captured by the weighted sentiment. The latter had its weekly peak on 24 March and has since fallen back to its weekly low levels. DOT’s volatility also underscored the resistance expectations further down the road.
Although the volatility and weighted sentiment highlight a bearish bias, things are different in the derivatives segment. Both the Binance and DYDX funding rates have improved significantly in the last five days. Note that this improvement in the derivatives market might also allude to higher demand for leverage traders, including short sellers.