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The Polkadot (DOT/USD) price was in a tight range on Tuesday as interest in cryptocurrencies rebounded. The coin’s price is trading at $20.50, which was about 97% from its lowest level in July. This rally gas brought its total market capitalisation to more than $20 billion, making it the 9th biggest coin in the world.
Polkadot recovery rally pauses
Polkadot is a fast-growing ecosystem that was built by Gavin Wood, who was also a co-founder of Ethereum. The platform is similar to Ethereum in that it helps developers build decentralised applications. Some key differences are that it was built from the ground-up using the proof-of-stake technology and that it was among the first digital platforms to embrace sharding.
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Polkadot has several key components, with the core of it being the relay chain. The other key components of the Polkadot ecosystems are the parachains, parathreads, and threads. In July, the developers launched the first parachain auctions that resulted in five winners. The Polkadot proof-of-stake consensus is made up of nominators, validators, collators, and fishermen.
More projects have been launched on the Polkadot network in the past few months. Among the top ones are Kusama, Chainlink, Ontology, Ankr, and renBTC. These are some of the most popular blockchain projects in the world. Developers love the Polkadot ecosystem because of its high speed and lower costs.
The Polkadot price has been in a strong bullish trend after it found strong support at $10.37 in July. This rally happened as investors interest in digital currencies resumed following the slump in the past few months. Other coins have also rallied substantially, with Bitcoin adding $16,000 in the past two weeks.
Ethereum, on the other hand, has almost doubled from a low of $1,700 to more than $3,200. This price action shows the close correlation among digital currencies.
Polkadot price prediction
The 4H chart shows that the DOT price has been in an upward trend in the past few weeks. Along the way, the coin has moved above the ascending trendline shown in black. The price has also moved above the 25-day and 50-day moving averages.
It has also moved above the key resistance at $17.70 while the MACD has formed a bearish divergence pattern. Therefore, there is a possibility of a pullback in the near term. If this happens, the next key level to watch will be the support at $17.70. On the flip side, a move above $22 will invalidate the bearish view.
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