Polkadot Resistance Archives

Polkadot, the computing platform known for its interoperability and scalability, has shown remarkable growth in key metrics during the latter part of 2023, as outlined in a recent report by Messari.

Outpacing Crypto Market Growth

According to Messari’s findings, Polkadot’s circulating market cap experienced a remarkable 111% quarter-on-quarter (QoQ) growth, reaching an impressive $8.38 billion.

This growth outpaced the overall crypto market’s growth of 54% during the same period. Furthermore, Polkadot’s year-on-year (YoY) change reached 94%, solidifying its position among the top 15 crypto projects by market capitalization.

Polkadot

In terms of revenue, Polkadot witnessed a substantial surge of 2,880% QoQ, generating $2.8 million in Q4 2023. This surge was primarily attributed to the significant rise in extrinsic, driven by the introduction of Polkadot Inscriptions.

Messari suggests that even excluding the four-day spike from the Inscriptions, Polkadot’s revenue would have doubled from the previous quarter. It is worth noting that Polkadot’s revenue tends to be relatively lower compared to its competitors due to the structural design of its network.

Polkadot Witnesses Significant Increase In Active Addresses

Following the launch of OpenGov – the governance module and framework within the network – in June, the Polkadot Relay Chain experienced a surge in account activity, largely due to increased governance participation.

Because the Relay Chain is critical in facilitating governance processes, it experienced a spike in active addresses on October 24, when users claimed their locked DOT tokens from the first batch of parachain auctions held two years earlier.

Polkadot

Throughout Q4, the Polkadot Relay Chain averaged over 10,000 daily active addresses, representing a substantial 90% QoQ increase. Excluding the October 24th activity related to DOT token claiming, the average number of active addresses still saw a significant 70% rise in QoQ, reaching 9,000.

Additionally, Cross-Chain Message (XCM) transfers on the platform increased by 150% QoQ, reaching an all-time high of 133,000. The total number of active XCM channels nearly tripled in 2023, reaching 203 by the end of the year.

According to Electric Capital’s rankings, Polkadot has 800 full-time and 2,100 total developers, making it one of the largest crypto ecosystems in developer participation.

DOT Price Shows Mixed Performance

Despite notable growth in key metrics demonstrating the network’s expansion, the price of Polkadot’s native token, DOT, has not followed suit and has even experienced declines over longer time frames despite positive developments.

Currently, DOT is trading at $6.7420, representing a slight 0.3% price increase in the past twenty-four hours, coupled with a 9% year-to-date gain.

However, over the past fourteen and thirty days, the token has recorded a 6% and 22% price drop, highlighting the absence of bullish momentum and catalysts that could propel DOT to higher levels.

Polkadot

Although it reached a 19-month high of $9.5711 on December 26, the subsequent price drop has led DOT to a critical juncture, potentially erasing its gains over the past year.

If the current level and its nearest support at $6.3229 fail to halt further price declines, DOT could potentially drop to the $5.4830 level, which serves as the next major support in the token’s 1-day chart.

Conversely, if DOT surpasses its upper resistance at $7.0392, the next objective would be to break the short-term downtrend structure, facing the $7.5332 resistance and another resistance at $8.1631. This would pave the way for another consolidation phase at its 19-month high.

Featured image from Shutterstock, chart from TradingView.com

Polkadot Weekly Price Has Formed A TD Sequential Sell Setup Recently

In a new post on X, analyst Ali has pointed out that a TD Sequential sell signal has been forming for Polkadot recently. The “TD Sequential” refers to a tool in technical analysis that’s generally used for pinpointing likely points of reversal in any asset’s price.

The indicator is made up of two phases. In the first phase, called the setup, candles of the same polarity are counted up to 9. After the ninth candle, a probable reversal in the price may be assumed to have taken place.

If the setup’s completion occurred with the overall trend being towards the up (that is, the nine candles were green), the asset might have hit a top. Similarly, a bottom could be in if the price had been going down.

The second phase, known as the “countdown,” begins right after the setup’s completion and lasts for thirteen candles. At the end of these thirteen candles, another probable reversal in the asset could be assumed to have occurred.

Recently, Polkadot’s weekly price has completed a TD Sequential phase of the former type, as the chart below shared by the analyst shows.

As is apparent from the graph, the Polkadot weekly price has finished the TD Sequential setup phase with green candles recently. This could suggest that a sell signal has now formed for the cryptocurrency.

In the same chart, Ali has also displayed the data for the 100-day exponential moving average (EMA) for the asset, a level that has been a source of resistance in the past.

Interestingly, this TD Sequential setup has completed just as the weekly price of the cryptocurrency has approached the 100-day EMA. “This could lead to a spike in profit-taking, potentially driving DOT down to $7.50,” explains the analyst. From the current spot price, a drawdown to this level would mean a drop of more than 18% for Polkadot.

DOT Is Up Almost 3% During The Last 24 Hours

While these bearish developments have occurred in the weekly price of DOT, the asset has still continued to rise during the past day, as its price has now cleared the $9.2 level.

Below is a chart that shows how Polkadot has performed during the past month.

The green returns during the last 24 hours are a continuation of the bullish momentum that DOT has enjoyed in the past week, a window inside which it’s now up almost 39%.

Though the asset has been able to continue this run for now, the technical obstacles it’s facing in terms of the TD Sequential and 100-day EMA could mean that the top might be near for the coin.