It has been relatively difficult for the market to focus on developments in the crypto space, rather than price speculation. However, this hasn’t stopped networks like Polkadot from moving full steam ahead toward their WEB3 vision. A recent update even pointed to a busy period for the network, so here’s what to expect.
Polkadot has just confirmed the launch of its next parachain lease auctions. The announcement also confirmed that multiple board events are planned for August. These events, combined, can boost demand for DOT. This is because of the lock-up periods associated with governance and parachain auctions.
The next parachain lease auction starts today in block 11_473_600. https://t.co/hyZxkUHOXw
— Bill Laboon | W3F (@BillLaboon) August 5, 2022
As for the price action of the DOT, the trading volumes of the cryptocurrency have increased significantly. It now ranks in the top 10 cryptos by trading volume, according to WhaleStats.
Check out the top 100 whales here: https://t.co/f4ZJg8SIWe
— WhaleStats – the top 1000 BSC richlist (@WhaleStatsBSC) August 6, 2022
Now it is unclear whether higher volumes are directly related to the announcement of the parachain lease auctions. The underlying mechanism requires projects competing for parachain slots to contain a significant amount of DOT to stand a decent chance of winning the parachain slots.
What do the graphs say?
DOT registered an increase of >9% this week. This advantage resulted in a retest of its near-term resistance line near the USD 9 price level.
Although the advantage was shortened after the resistance line retest, the resulting disadvantage was limited. Investors may choose to stick with their DOT, especially in light of planned developments in August. Another possibility is that DOT’s healthy demand near the press time level is removing most of the selling pressure.
A bearish pullback can be expected after the resistance retest. Aside from low bearish pressure, DOT’s weighted sentiment pointed to the likelihood of more upside. In fact, the slight pullback had already pushed weighted sentiment back into negative territory (-0.52) at press time.
In addition, the number of contributors to developer activity at Polkadot has increased significantly since early August. This is in line with DOT’s planned developments for the month. This is a confidence boost, especially for long-term DOT investors.
Polkadot’s August schedule is healthy for the network and for DOT’s price action. It may encourage favorable investor sentiment, but the outcome will also have to deal with prevailing market forces.