December 3, 2022


It was relatively difficult for the market to focus on developments in the cryptocurrency space, rather than on price speculation. However, this has not hindered networks like Polkadot from charging at full speed, towards its WEB3 vision. In fact, the latest update highlighted a busy period for the network, so here’s what we can expect.

Polkadot has just confirmed the launch of the following parachute rental auctions. The announcement also confirmed that several governance events are scheduled for August. Taken together, these events may increase the demand for DOT. This is due to the closing periods associated with governance and parachine auctions.

As far as the DOT price action is concerned, the cryptocurrency trading volumes have skyrocketed. It is now among the top 10 cryptocurrencies by trading volume, according to WhaleStats.

Now, it is unclear whether the large volumes are directly related to the announcement of the parachine rental auctions. The basic mechanism calls for projects competing for the parachin slots to keep a large amount of DOT for a good chance of winning parachin.

What do the graphs say?

The Department of Transportation reported a slight increase of >9% this week. This upward trend has led to a retest of the short-term resistance line near the $9 level.

Source: TradingView

Although the uptrend was cut short after a retest of the resistance line, the resulting downtrend was limited. Investors may choose to stick with their DOT program, especially in light of developments scheduled for August. Another possibility is that healthy demand for the DOT near the press time level could cancel out most of the selling pressure.

A bearish pullback can be expected after a retest of resistance. Aside from lower downward pressure, the weighted DOT sentiment indicated the potential for more upside. In fact, the slight pullback had already pushed the weighted sentiment into negative territory (-0.52) at press time.

Source: Santiment

Moreover, the number of contributors to developer activity in Polkadot has increased significantly since the beginning of August. This was in line with the Department of Transportation’s planned developments for this month. This is a confidence booster, especially for long-term DOT investors.

Source: Santiment

conclusion

Polkadot’s August schedule is healthy for the network and for DOT price action. It may encourage positive investor sentiment but beyond that, the outcome will also counter the prevailing market forces.





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