Polkadot is popping up on investors’ radars and rising up on the trading charts, following DOT’s all-time high after recent updates to the parachain network. But how exactly does the 8th largest cryptocurrency in the world work and why are some analysts saying that Polkadot will rise to $100 ? Let’s find out.
Gaining roughly 20% in the last week and more than 60% in October, DOT has recently been on a massive bull run. On November 2, the coin soared past $50, making a new all-time high of $51.49. The altcoin was experiencing an uptrend throughout October but was finding the $45 mark a challenging resistance zone. FXstreet even reported that the coin was in a strong and bullish zone, due to the strong RSI and MACD indicators. Since then, DOT broke the resistance zone and is currently trading at $51.56 (CoinMarketCap) at the time of writing. The coin is currently the 8th largest cryptocurrency in the world, with a market cap of just under $51 billion. With a 24 hour trading volume of almost $45 billion, Polkadot is looking like a very strong cryptocurrency going into the first week of November.
But let’s take a look at what this alt-coin is all about.
What is Polkadot ?
Put simply, Polkadot is a software that looks to boost a worldwide organization of PCs to work a blockchain on top of which clients can dispatch and work their own blockchains. This is similar to the kind of ecosystems that the likes of Ethereum and Cosmos are creating, but they differentiate in the way that they are designed to operate.
Polkadot has been created in such a way that it can operate two types of blockchains. One is the relay chain, where the transactions are permanent and the other is known as the parachain. The parachain is a user-created network which allows users to gain the advantage of using this blockchain for a variety of different uses. The parachain does not disclose the user data to the public unlike other blockchains, and has the ability to process a high number of transactions due to its advanced scalability.
Despite Polkadot’s creation only being in 2020, it has managed to ascend to the number 8 spot and has the backing of investors as well. The network has raised over $200 million from interested investors, making it one of the most well-funded cryptocurrencies out there. This adds value to the currency, allowing it to compete with similar cryptocurrencies like Matic (Polygon) and Cosmos (Atom). Interestingly enough, the reason for the recent spike of DOT has to do with news surrounding it’s parachain.
Why Is Polkadot Rising?
The Polkadot team revealed that the movement to empower parachain enlistment and group funding has officially been passed by Polkadot’s council and will be pushing ahead to a public mandate. This was huge news for the cryptocurrency, because of the benefit it provides to developers.
The proposition will allow developers and designers to enroll parachains and look for financing for their various projects being created on the blockchain. his most recent advancement comes not exactly a month after the blockchain reported that its parachains are prepared to dispatch, marking the calendar for November 11.
Polkadot team took to Twitter to make the announcement :
This announcement has set in stone the likelihood of a parachain auction that will be taking place over five weeks, with one auction every week. It will give investors the opportunity to learn about the developed projects and join in with their financial aid to further see the project go on the parachain.
The only step left is approval from the public referendum. The go-ahead is likely to be given once the majority agrees, allowing the parachain teams to register for a crowdloan which will be open to investors as early as November 4th. This news broke the $45 resistance zone for the coin, which sky-rocketed by more than 20% after the announcement on November 1. Since then, investors who have been backing the coin for the long run along with crypto analysts have been giving their future price targets and positions for DOT.
Could Polkadot reach $100?
With the above chart provided by TradingView and analyzed by FXstreet analysts, it seems that an ascending parallel channel has been created on the daily chart. This indicates that the trade still has a high chance of going up. The next price target according to the chart is $55 in the short term. The top-side indicator suggests that a move to as high as $88 is possible if the coin continues to consolidate and grow in its 24-hour trading zone. But the bearish indicators suggest that the possibility of the coin going down to $44 is not out of the question.
The $88 price level suggests an almost 60-70% price increase, which would be a dream come true for many of the investors. But then again, these are merely predictions, despite the use of analytics, the crypto market is very volatile. Do not invest without doing your own research first, since it may prove to be costly in the long run. Polkadot’s latest parachain update definitely makes it a lucrative bet, but how much to cash in and when to cash out separates the marker winners from the losers.