- DOT up 50%
- Polkadot interoperability edge
- Polkadot growing use case
The cryptocurrency market is in a recovery patch if double-digit percentage gains registered over the past month is anything to go by. Investors jostling for positions in highly battered assets’ have been the catalyst fuelling the strong bullish momentum in the sector. Polkadot is one of the coins spearheading the move higher, going by the 50% rally over the past month.
DOTUSD technical analysis
Renewed investor interest in Polkadot comes at the backdrop of the project standing out from other blockchain networks. Its competitive edge stems from a cross-chain lattice of functionality that enables the interconnections of various blockchain networks. Likewise, it has laid the foundation for the next generation line of business and communications.
Ambitious growth might affirm why DOTUSD has resorted to trading in an uptrend after a bounce back from 2022 lows. After a 74% pullback from all-time highs, the pair has started racing higher, recouping some of the losses. The Relative Strength Index has already risen above the 50 level, affirming a buildup in buying pressure.
A break out of the descending channel underscores the emerging uptrend after the 74% pullback. While DOTUSD has pulled back from the $23 area, the pullback is a minor correction attributed to traders taking profits after the 50% rally from February lows.
DOTUSD rallying and closing above the $23 resistance level should pave the way for further price gains to the $28 area, seen as the next key resistance level. On the flip side, failure to take out the $23 resistance level could leave the coin vulnerable to a deep pullback.
In the meantime, the $20 area is the short-term support level above which DOTUSD remains well supported for further upside action. A sell-off below the support level could trigger a pullback to the $16 area.
Polkadot interoperability prowess
Polkadot’s long-term prospects are looking increasingly positive as it solves some of the issues that have affected the mainstream adoption of blockchain technology. It is dubbed as an Ethereum killer as it addresses a number of issues pertaining to congestion and scalability.
However, it is the way Polkadot helps blockchains communicate with one another that appears to have strengthened its edge in a sector where cryptocurrencies specialize in a single function. Blockchains inability to communicate with one another is a major issue that has stalled the evolution of the cryptocurrency industry.
Polkadot is making it easy for developers to come up with sophisticated applications that take advantage of different tokens’ unique strengths. For instance, developers can come up with systems that take advantage of Ripple’s edge in money transfers to enable global banking services while at the same time leveraging the Ethereum layer to process smart contracts.
In addition to cross-chain compatibility, Polkadot is also going places as the next generation of social media and content publishing takes shape. Its blockchain is currently billed as Web 3.0. Its blockchain could end up playing an important role in enhancing the collection of content and publishing on social media platforms
Final thoughts
While Bitcoin has carved a niche for itself as digital gold and Ethereum in powering smart contracts, Polkadot is sending shockwaves on enhancing blockchain interoperability. Its prowess in improving the interconnection of blockchains is an important aspect that affirms its need in the burgeoning sector.
As developers look to come up with apps and projects that take advantage of different blockchains, Polkadot could be at the heart of enabling the interconnection. Consequently, demand for the DOT coin should increase amid the increased use. Heightened demand can only result in further price gains.
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