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Polkadot (DOT) Price: Rebound Soon?

Sun, 9/06/2024 – 13:57

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What is Polkadot?

Polkadot is a blockchain platform and cryptocurrency, with DOT being its native token. The platform is designed to enable different blockchains to exchange messages and perform transactions without the need for a trusted third-party. This capability facilitates cross-chain transfers of data and assets, making it possible to build decentralized applications (dApps) on the Polkadot network.

The primary blockchain in the Polkadot network is the relay chain. It is responsible for network governance, validating data, achieving consensus and executing transactions. User-created parallel chains are auctioned off. These allow users to create and operate their own blockchains using Polkadot’s infrastructure.

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The relay chain acts as the governance layer of the Polkadot network, ensuring that all transactions and data transfers are validated and consensus is achieved across the network. Parachains leverage this infrastructure to operate independently while still benefiting from the security and interoperability provided by the relay chain.

In addition, Polkadot enables seamless cross-chain communication and transfers, making it a versatile platform for building interconnected blockchain ecosystems. The network is capable of processing approximately 1,000 transactions per second, showcasing its scalability and efficiency.

Important updates and new projects

Polkadot has recently implemented a significant upgrade called Asynchronous Backing, which optimizes the validation process for parachain blocks by the relay chain. This upgrade brings several improvements.

The relay chain is now twice as fast in producing blocks., while the protocol supports three-five times more extrinsics per block. There is a 6-10 times boost in blockspace availability, allowing for greater scalability.

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To bolster its presence and growth in Asia, Polkadot has launched PolkaPort East in Hong Kong. This independent entity is tasked with leading investor relations and expanding Polkadot’s footprint in the Greater Bay Area.

The Web3 Foundation has provided a grant to PolkaPort East to support its initiatives. PolkaPort East will focus on attracting participants to the Polkadot ecosystem, including projects, developers, VCs, funds and general Web3 investors.

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The initiative will target various groups, such as university blockchain collectives, fintech companies and local governments interested in blockchain technology.

Price breakout soon?

Polkadot (DOT) is currently experiencing a local low at $6.6. This week, the price has dropped from $7.6, a key level that has repeatedly hindered the price from rising further and caused a shift from a positive to a negative trend. Conversely, the price has found substantial support at $7, where buying pressure has historically been robust enough to prevent further decline.

Source: CoinMarketCap

Since mid-March, when DOT surged to its previous all-time high of $11.55, the cryptocurrency has faced notable challenges. First, DOT has dropped sharply to a low of $5.80 since then. After recovering from this low, DOT has been trading in a narrow range between $6.40 and $7.50 since April 14.

Polkadot is often referred to as one of the “sleeping giants” among major altcoins. Analyst Michael van de Poppe has identified strong indicators suggesting potential upward movement. However, the current technical indicators provide a mixed outlook.

The moving averages for DOT currently signal a sell. Similarly, RSI stands at 38, placing it in the “neutral” zone. This suggests that while DOT is not currently overbought or oversold, it may be some weeks away from a significant rebound.

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