Polkadot [DOT]: Will a new update translate into a new price uptick
DOT, which is currently the world’s 11th largest crypto in terms of market cap, registered a sluggish performance last week. In fact, it fell by negative 5% over the last 7 days.
At press time, DOT was trading at $7.06 with a market capitalization of $7,829,624,527. However, DOT developers recently pushed an update to the network, one that brought performance enhancements. Ideally, these might help the altcoin gain upward momentum on the charts soon.
What’s going on?
DOT’s price fell from $7.74 to as low as $6.85 in just 2 days. Now, while the crypto did recover somewhat, it was not enough to beat the bears as the chart was painted red, at the time of writing.
Even so, the new update pushed by the developers will bring certain changes to the network. These changes will especially help in increasing its efficiency across the board.
In fact, according to an official statement, the update should reduce the load on validators significantly and result in better parachain block times on test networks.
This development complimented certain on-chain metrics as well. For instance, while DOT’s price plunged, its development activity took the opposite route and surged considerably over the last few days. An uptick in development activity indicated more interest from developers in the blockchain, something that only boosts a network’s credibility.
An increase in development activity, coupled with the updates that the new Polkadot v0.9.28 have brought, give an indication that the altcoin might soon break north on the price charts.
At the time of writing, DOT was projecting bearish advantage across the board, with several indicators including the RSI and the Stochastic pointing to the same. Ergo, investors must keep a keen eye on DOT’s price action to make the most out of the market condition.
A look at DOT’s 4-hour chart also painted a similar picture of bearish upper hand in the market. DOT flashed resistance around the $7.7-mark for a few days after the plunge.
The Exponential Moving Average (EMA) Ribbons revealed that after a tussle between the bulls and bears, the former were not able to beat the latter as the gap between the 20-day EMA and 55-day EMA widened.
The MACD’s reading also complimented EMA Ribbons, as a bearish crossover happened on 26 August. This minimized the chances of a breakout on the charts.
To conclude, although the aforementioned update and surge in DOT’s development activity looked quite promising, the actual scenario seemed to be different.
In fact, most of the indicators were siding with the market bears. Therefore, expecting an uptick in the short-term is pretty unlikely.