Polkadot (DOT) is still on a downward path as sellers dominate, pushing the price closer to the support level at $6.40. The decline began when Polkadot (DOT) fell below the important $7 mark on Friday and continued through the weekend, eventually reaching $6.61 by Sunday.
Can Polkadot (DOT) hold above $6.40 and recover from its support level while striving to boost network awareness?
Polkadot’s Recent Price Movements
Over the past days, Polkadot has largely remained within a defined range, suggesting a balance between buyers and sellers. Its highest point this month was on May 2, reaching $7.27. However, since then, it has been steadily declining, with sellers breaking through crucial support levels along the way.
On May 6, Polkadot slipped below the 200-day SMA, falling to $7.12. The 20-day SMA, positioned around $7, served as a support level during this time. Despite dropping to $6.99 on May 7, Polkadot managed to consolidate, climbing to $7.04 by May 9.
However, bearish sentiment returned on May 10, driving Polkadot down by 4.43%. This pushed the price below both the crucial $7 mark and the 20-day SMA. Over the weekend, Polkadot continued to decline, dropping by 1.11% on Saturday and 0.71% on Sunday, settling at $6.61.
In the current session, Polkadot has experienced significant volatility, hitting a low of $6.43. However, it has since rebounded and is currently trading at $6.59, representing a 0.36% decrease.
Polkadot (DOT) Price Analysis: Where to Next?
Most analysts had foreseen a downturn in the near term, targeting $6.40, a level where Polkadot (DOT) has robust support. Despite sellers pushing DOT below $7, it has managed to stay above its support level.
If sellers maintain control, DOT is likely to continue its decline towards $6.40. Breaking this support level could result in a further drop to $6. However, any significant price movement necessitates a breakout from the current range of $6.40 to $7.
A recovery could see DOT testing the resistance at $7, with the next target being the 200-day SMA at $7.30. Nonetheless, sideways consolidation at DOT’s current level may precede any major recovery.
Both the MACD and the Parabolic SAR currently indicate bullish signals, suggesting a potential recovery in the near term. However, should sellers push DOT below $6.40, these indicators could flip to bearish.
Although open interest experienced a notable decline, it has since shown a small but steady recovery. Whether this uptick in open interest translates into increased demand and bullish momentum remains uncertain.
Polkadot’s Efforts and Technological Advancements
Active Collaboration for Network Awareness: Despite the recent decline in the Polkadot (DOT) price, the network has been actively engaging with stakeholders to raise awareness about its capabilities. These collaborative efforts aim to enhance understanding and adoption of the network among users and developers. However, the long-term effectiveness of these initiatives remains to be seen.
Implementation of Asynchronous Backing: Additionally, the Polkadot network recently announced the implementation of Asynchronous Backing, a significant upgrade that impacts the validation process of parachain blocks. This upgrade is expected to have a substantial impact on the network’s efficiency and scalability.
Enhanced Block Production and Availability: Asynchronous Backing is anticipated to enable a two-fold acceleration in block production and a notable increase in extrinsic per block, ranging from 2x to 5x. This enhancement is expected to streamline the utilization of parachain blocks and significantly increase blockspace availability within the network.
Boosting Throughput for Web3 Applications: The implementation of Asynchronous Backing is projected to boost network throughput by 8x, without compromising security measures. This advancement holds significant implications for supporting Web3 applications across various sectors, including gaming and decentralized finance (DeFi). By bringing Web2 scale capabilities into the Web3 realm, Polkadot aims to cater to the needs of large-scale platforms like Mythical Games and facilitate their growth and development.
⚠️Disclaimer
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