Connect with us
Active Currencies 14420
Market Cap $2,654,916,693,311.20
Bitcoin Share 49.90%
24h Market Cap Change $-2.63

Polkadot parachains might trigger another DOT move in this direction

2min Read

Although the Crowdloans are aimed at network stability and efficiency, previous token unlocks have either proven to end in consolidation or a nosedive.

Polkadot parachains might trigger another DOT move in this direction

Share this article

  • Millions of DOT tokens will be unlocked as a result of the Crowdloan maturity
  • DOT may note an uptick but in the end, it may retrace below $4 on the charts

One common thread connecting altcoins over the last few days is a price recovery. However, Polkadot [DOT], unlike other top altcoins, has not been able to replicate the same form. And, as it stands, another plunge down could be on the way for the native token of the web3 project.


Is your portfolio green? Check the Polkadot Profit Calculator


Nearing maturity, nearing plunge?

A notable ground for the projection is the forthcoming maturity date of Polkadot parachain Crowdloans. Crowdloans are supported natively on the Polkadot network as a mechanism to enable individuals to support specific parachain projects by staking DOT.

As a result of this process, projects get access to greater capital while they also enjoy the support of the Polkadot community.  According to Delphi Digital, the loan maturity would result in the unlock of millions of DOT tokens.

For context, token unlocks occur when tokens previously restricted are released into the market. According to the tweet, the first unlock would happen on 24 October while another round of DOT valued at $129 million would be sent into circulation on 16 January 2024. 

Although the Crowdloans are aimed at network stability and efficiency, the previous token unlocks have either proven to end in consolidation or a nosedive. This, because an increase in circulation usually ends up in an increase in selling pressure.

At the time of writing, DOT’s weighted sentiment was -0.912. Weighted sentiment multiplies the amount of social volume by the negative/positive commentary about a project. When the metric is positive, it means traders are optimistic about the performance of the token involved.

Thus, DOT’s stay in the negative zone means a sizeable part of the market does not see an impressive performance for the token in the short term.

DOT price action and Polkadot weighted sentiment

Source: Santiment

All is not in the bears’ control

It would, however, be partial to assume that DOT is destined for doom without looking at the technical indicators. According to the DOT/USD daily chart, the 9 EMA (blue) had crossed over the 20 EMA (yellow). This indicates that DOT has been showing bullish signs. If maintained, DOT’s price could move towards $4.

Furthermore, the 50 EMA (cyan) was above the 20 EMA. Should the position of the indicators remain the same going forward, DOT may record bearish momentum in the mid-term. However, that could be after the token’s value had risen to an extent.


Realistic or not, here’s DOT’s market cap in BTC terms


DOT’s potential to rise to $4 was also reinforced by the Relative Strength Index (RSI). At the time, the RSI was 62.30, meaning that there was enough buying momentum to push the price forward.

DOT price action

Source: Santiment

Share

Victor Olanrewaju is a full-time journalist at AMBCrypto. Settled in Lagos, his fascination with blockchain technology and the cryptocurrency market arose out of his love of freedom and everything free. As a Nigerian, Victor understands the impact unfounded financial restrictions have on a population. He sees Bitcoin and cryptos as a way to circumvent these obstacles, as a tool for value creation despite all the setbacks. A graduate in Physics, Victor previously worked as a Senior Marketer at Melange Technologies. Before that, he dealt with crypto-marketers on a regular basis in his capacity as Copywriter at Ventrix Media. At AMBCrypto, Victor’s focus is on assessing the real effectiveness of both on-chain and off-chain developments on a project and its community sentiment.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.