[ad_1]
If you’re a fan of blockchain technology, there’s a significant chance that you’ve been told to buy DOT recently. The coin is the native token for Polkadot, one of the most popular blockchain platforms in the world.
Polkadot’s popularity as an Ethereum competitor has been notable in 2020. It has also helped that investors have been able to buy DOT and push it to the top of the CoinMarketCap rankings. Below, we’ll look into the coin’s recent performance and what its future could hold.
Polkadot: Ending the Blockchain Trilemma
Dubbed the “blockchain or blockchains,” Polkadot is a high-performance blockchain network that looks to solve the three major blockchain operation issues – decentralization, security, and scalability.
Most blockchains have to choose two of the three characteristics above – a conundrum known as the blockchain trilemma. Ethereum became so successful because of its seamless operational architecture, but it has been running into problems with scalability. On the other hand, EOS offers almost instant transactions. But, the network has nominated block validators, opening the door to manipulation and centralization.
All blockchains have to make this trade-off at some point. But, Polkadot is trying to create an environment where all characteristics are present.
The blockchain operates using a Relay Chain and parachains. The Relay Chain provides the central network, offering security and transaction confirmation using a system of validators. Then, parachains are customized blockchains that run “in parallel” to the Relay Chain. Parachains are built and connected to the Relay Chain, but they have semi-autonomy.
Parachains also interact with each other seamlessly, and Polkadot has a bridge that allows it and its projects to interact with external blockchain networks like Ethereum and Bitcoin.
DOT is Polkadot’s governance token. Users can buy DOT and use it to vote on network upgrades and other proposals.
DOT: Price Movement in 2021
Polkadot itself became more popular in 2021 after an increasing number of developers discovered issues with building on the Ethereum blockchain. The latter had become less scalable, and developers were looking to move elsewhere. Naturally, Polkadot was a top option.
The increase in adoption immediately led more people to buy DOT. The token, which entered 2021 trading at $9.01, immediately saw its price jump to $46.6 by April 3. During that time, DOT also broke into the CoinMarketCap top 10 rankings for the first time.
The gains didn’t stop there. More investors trooped in to buy DOT as they understood Polkadot’s uniqueness, and the token hit its all-time high of $49.7 on May 15. But, the downturn eventually came and caught the asset.
Following a flood of sell orders, DOT saw its price slump to successive lows. The coin’s price hit $13.6 on May 23, marking a 72.6 percent drop in just 10 days. But, DOT’s bottom came on July 22, when it hit $10.27. Since then, it has been consolidation.
With the market rebounding strongly in August, DOT has been able to gain some ground. The coin entered August trading at $16.92, and it has since surged to a current price peg of $26.25. With that price, DOT is up 7.3 percent in the past 24 hours and a healthy 29.3 percent in the past 7 days.
DOT: Technical & Fundamental Analysis
DOT is doing quite well on the technical front. The asset has been able to benefit from the market recovery, beating its 20-day moving average (MA) of $20.29. Its price is also inching closer to its 200-day MA of $27.36, meaning that the bills just might be able to push the asset towards bigger gains in the coming days.
Elsewhere, DOT has a relative strength index (RSI) of 80.20. That’s pretty high, showing that more investors have been able to buy DOT in the coming days.
As for fundamentals, Polkadot has been pretty silent. The last major update from the blockchain came on July 23, when Kaura Swap, the first decentralized exchange on its platform, launched. Kaura Swap was created by Acala, a decentralized finance (DeFi) platform with backing from Coinbase Ventures.
[ad_2]
