Polkadot [DOT]: Will a new update translate into a new price uptick
DOT is currently the 11th largest cryptocurrency in the world in terms of market capitalization, having underperformed last week. In fact, it’s down 5% over the past seven days.
At press time, DOT is trading at $7.06 with a market cap of $7,829,624,527. However, DOT developers recently pushed an update to the network that brought performance enhancements. Ideally, these could help the altcoin gain upward momentum on the charts soon.
How is this going?
The price of DOT fell from $7.74 to $6.85 in just 2 days. Now, while the cryptocurrency has indeed recovered, at the time of writing, the charts are painted red not enough to beat the bears.
Even so, new updates pushed by developers will bring certain changes to the network. These changes will especially help improve its efficiency across the board.
In fact, according to a official statementthe update should significantly reduce the validator load and result in better parachain block times on the test network.
This development also complements certain on-chain metrics. For example, while the price of DOT has plummeted, its development activity has taken the opposite route and has surged significantly over the past few days. The increase in development activity indicates greater developer interest in blockchain, which only increases the trustworthiness of the network.
The increase in development activity, coupled with the updates brought by the new Polkadot v0.9.28, suggests that the altcoin could soon break north on the price chart.
At the time of writing, DOT is in bearish territory across the board, with several indicators including the RSI and Stochastic pointing in the same direction. Therefore, investors must pay close attention to the price action of DOT to take advantage of market conditions.
A look at the 4-hour chart of DOT paints a similar picture of bearish dominance in the market. In the days following the plunge, DOT found resistance near $7.7.
The Exponential Moving Average (EMA) ribbon shows that after the battle between the bulls and the bears, the former cannot beat the latter as the gap between the 20-day EMA and the 55-day EMA widens.
The MACD reading also appreciates the EMA ribbon as a bearish crossover occurred on August 26. This minimizes the chances of a breakout on the chart.
All in all, while the aforementioned updates and surge in DOT development activity look promising, the reality appears to be different.
In fact, most indicators support market bears. Therefore, the possibility of an upside in the short term is expected to be low.