Polkadot on a buying spree: DOT technicals turn bullish!
The para-chain system of Polkadot allows for the creation of multiple parallel blockchains that can interact with one another and with the main Polkadot chain. It allows for greater scalability and interoperability than traditional single-chain blockchain networks.
Polkadot uses a unique form of consensus named “Nominated Proof-of-Stake” (NPoS), which allows token holders to “nominate” validators to secure the network. It allows for more decentralization while enabling token holders to earn a return on their investment by participating in the validation process.
Apart from interoperability and scalability, Polkadot offers several positive advantages in terms of Innovation and Governance. Polkadot allows for the development of new types of blockchains and new ways of designing and implementing them.
The flexibility of this platform encourages the creation of new decentralized applications that could not be created using other platforms. Moreover, its built-in governance system allows token holders to vote on changes to the network, such as protocol updates or adding new para-chains.
This creates a more democratic system of decision-making and allows for more community participation in the development of the platform. With its market capitalization of $5,665,651,478, DOT is strongly placed in the hierarchy of cryptocurrency even during its bearish trend.
DOT token was beaten hard in 2022 since the decline began in November 2021. 2023, on the other hand, has started with a positive reaction from buyers. With improving technical indications, DOT is moving towards new resistance levels that could hinder its consistent green movement. Read our DOT coin price prediction to know how long the positive trend will last!
DOT token witnessed a month-on-month decline reaching a dip of $4.24. Interestingly, this price was tested in November 2020, even before the bullish trend began in 2021. The price action thus confirmed that the entire positive movement of 2021 has been washed off, and the token is starting afresh from these levels as if the demand for this token has dipped to November 2020. With consistent green candlesticks developing since the new year began, there could be a highly positive reaction to the token value.
Gradually DOT is nearing its $5.27 immediate resistance, which was a support level up until December 2022. As buyers exist in this position, support is highly unlikely to develop at this level, and hence resistance could hamper its uptrend.
If this level is breached with relative ease, the next resistance will develop around the 100 EMA curve, currently trading near $5.56. Overcoming this resistance could propel the DOT token to $8 without resistance based strictly on the supply-demand dynamics.
RSI and MACD both have turned highly bullish in the short term. As RSI climbs to the 60s, the outlook for this token’s outlook will greatly benefit from a prompt buying spree.
