What Does Make the DOT Crypto So Powerful? Will It Skyrocket Soon?

• Polkadot is one of the topmost rankers of average Nakamoto Coffecient.
• The lower levels have rejected the price of the DOT crypto.

Polkadot, launched in 2020, is a “blockchain of blockchains,” enabling users to create and operate blockchains (parachains) atop its main relay chain, ensuring security but not supporting smart contracts.

Polkadot connects to other blockchains via bridges. Its native token, DOT, is used for governance, staking, and securing parachain slots. 

Price Overview Chart of DOT | Source: CoinMarketCap

A recent ‘X’ post from @PolkadotInsider shows that Polkdaot is ranked first in the top 10 Nakamoto Coffecient on a network. 

So, What exactly is the Nakamoto Coefficient?

On a proof-of-stake network, the Nakamoto Coefficient is the number of cryptos that control more than 33.33%, or one-third, of all stakes on the network by the node operators. 

More details can be found in the tweet given below by @PolkadotInsider:

Price Data Overview of Polkadot

When writing, the market cap of the Polkadot has advanced by 1.0% over the last 24 hours. Crypto also has an outstanding market presence, followed by a market cap dominance of 0.27%.

The price volatility of the crypto is medium, resulting in 3.93%, and the sentiment of the crypto is bearish, as per a renounced source.

Derivatives Data Analysis of Polkadot Crypto

The open interest of the Polkadot crypto has advanced by 1.2% in the last 24 hours, resulting in $274.54M. This shows a rise in the derivatives open positions of the crypto.

Polkadot Crypto Derivatives Liquidation Chart | Source: Coinglass

The long liquidation recorded for the Polkadot over the last 24 hours is worth $455.65K, much higher than the short liquidation of the crypto. It further results in a long/short ratio of 0.9524.

DOT Crypto Technical Analysis

The price of DOT crypto recently broke above a falling wedge pattern but is now consolidating within a narrow range. It is holding above the recent swing low, indicating some stability. 

DOT Crypto Daily Price Chart | Source: TradingView

Despite the breakout, DOT appears to be lacking momentum as it hasn’t advanced to higher levels. 

If buyers gain further control and the price breaks above the current consolidation zone with increased trading volume, we might witness strong bullish momentum in the near future. This scenario could potentially drive the price to higher levels.

The 50-day and 200-day EMAs on the daily chart of DOT crypto are displaying a golden crossover, indicating a bullish trend. If the price advances above those EMAs, the bullish bias will be emphasized.

The MACD and the signal line overlap, but both metrics trade above the mid-level, indicating strength in the price of the DOT crypto.

The RSI indicates weakness in the crypto momentum, which has declined to 46.28 at press time. It also has slipped below the 14-day SMA.

Summary

Polkadot’s robust design and strong Nakamoto Coefficient contribute to its power, with DOT used for governance, staking, and securing parachain slots. Despite recent price consolidation, increased trading volume could trigger bullish momentum, suggesting potential future growth.

If the price of the DOT crypto shoots to higher levels, it might take resistance at the level of $9.0 and $11.50. Also, the support levels for the crypto are $4.80 and $6.0.

Disclaimer

This article is for informational purposes only and does not provide any financial, investment, or other advice. The author or any people mentioned in this article are not responsible for any financial loss that may occur from investing in or trading. Please do your research before making any financial decisions.

Pratik Chadhokar