Polkadot’s DOT token has been in a bearish trend for the past few months, as concerns about the ecosystem have grown. Last week, the DOT token fell to $3.90, a drop of more than 50% from its highest level this year. It has underperformed popular coins such as Bitcoin, Tron and Ethereum.
Polkadot is one of the leaders in the blockchain industry. Developed by Ethereum co-founders, the platform allows creators to create parachains – Layer-1 blockchains that are independent and can overcome the limitations of any other chain.
Many developers have won parachain slots in Polkadot’s ecosystem. Some of the most popular parachains are Moonbeam, Clover Finance, Efinity, Litentry, Astar and Phala Network. However, many of these parachains, which were successful in the past, have been struggling to gain traction over the last few months, as seen in its DeFi ecosystem. The biggest player in Moonbeam DeFi, TVL, is only $52.4 million, and Moonriver is the 75th largest network with only $8 million. Karura, Astar and Phala Network have up to $8, $44 and $8 million respectively. This indicates that the network requires more activity.
The most recent Polkadot news was that Circle USDC was added as a new currency to Polkadot Asset Hub. USDC is currently the second largest stablecoin on the market with a value of more than $26 billion. The statement said: “Polkadot USDC is the official form of USDC for the Polkadot ecosystem, providing developers and users with access to a fully reserved, dollar-backed stablecoin that’s always redeemable 1:1 for US dollars.”
The daily chart shows that Polkadot has been in a bearish trend for the past few weeks. It dropped to $4.21 – the lowest point in June/December 2022. This level has been retested, which is an indication of a continuation in the bearish direction. The coin has remained below the 50-day moving mean and a cup and handle pattern has been inverted, indicating that the price is likely to continue falling as the sellers aim for the crucial support of $3.70. The bearish view will be invalidated if the coin moves above the $4.50 key resistance.
For those wishing to purchase Polkadot, OKX and Binance are two leading cryptocurrency exchanges. OKX is one of the leading exchanges in the world, providing advanced financial services for traders around the globe, while Binance has grown tremendously since its inception in 2017 and is now one of the largest cryptocurrency exchanges.
