Bitcoin’s monopoly over the market is undisputed; even though alts form an indispensable part of the market, a lot of altcoins tend to follow Bitcoin’s footsteps. However, looking at the recent performance of some major altcoins, some alts rallied independently and showed a lower correlation with Bitcoin and Ethereum’s price.
On the other hand, some potentially pump-worthy coins had a different fate and were dominated by the larger market sentiment. One such coin was Polkadot (DOT), but it sure wasn’t the only one on the list.
Confusing times for DOT investors
In the last 24 days, DOT rallied more than 100% and breached the major $20 support level, however, a psychological barrier at $22 remained even at press time which the alt was unable to break. Polkadot’s all-time high was $49.35 which was achieved on May 15, but as the alt’s price was down more than 50% at press time investors seemed unsure of its price trajectory.
While these indeed were confusing times for DOT, it was notable that its price had a stark relationship with BTC’s price. Even though Polkadot is a major alt the fact that it is more of a functional asset highlighting traditional on-chain functionality could be one reason why the alt followed the larger market sentiment. Notably, during this rally, some other altcoins like Cardano, Ethereum Classic, and even Bitcoin Cash seemed to be carving their own niche in terms of price. So what was it that made alts ranking lower than Polkadot (ETC and BCH) rally independently?
Here’s what DOT needs
Even though DOT highlighted strong pumping behavior in the past, this time one thing that lacked was high network development. During all the previous rallies, DOT’s development activity had maintained higher levels, this time, however, DOT’s dev activity was at an all-time low, at press time.
Even though DOT had decent social volumes, as seen in the chart, Polkadot’s social volumes usually stay high irrespective of a bull or bear market.
These coins have similar fates too
DOT is not the only coin that was awaiting a breakout from Bitcoin for a further rally, other alts like Uniswap and Kusama had a similar fate. Since July 22, when the rally began, Polkadot gained almost 100%, while Kusama hiked by 70%, and UNI saw a 90% rally. Even though these numbers looked good, all three assets had a trajectory very similar to Bitcoin and the larger market.
Uniswap and Kusama have highlighted independent pump capacity in the past but with BTC’s price overheating they have been consolidating too. In fact, notably, both these coins struggled at their major resistance trying to break the same.
Further, DOT, UNI, and Kusama all saw comparatively lower trade volumes on high prices as compared to the larger market. Inflows for these alts were decent and all three oscillated in the overbought zone; however, their RSIs were showing a downtick at press time. Even though most metrics highlighted a neutral view for the coins, a rise in development activity could change the game for them.