Despite most top cryptocurrencies ending up in the red today, Polkadot (DOT) stayed strong and even made slight gains. What’s the reason behind the price stability, and should you buy some DOT now?
Fundamental analysis: stellar fundamentals keep DOT stable
Polkadot is one of the cryptocurrencies (alongside Cardano) that many people consider is a direct competition to Ethereum and its utility as a platform. Polkadot was founded by the Web3 Foundation, a Switzerland-based Foundation created to facilitate a fully functional, user-friendly, decentralized, and open-source platform.
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Its founders are Dr. Gavin Wood, Peter Czaban and Robert Habermeier.
The Polkadot protocol aims to connect public and private chains, oracles, permissionless networks, and future technologies, allowing all of them independent blockchains to share information and transactions without ever needing to “trust” each other.
Polkadot’s current market stability can be attributed to its stellar fundamentals, as well as to the market “catching up” to Cardano’s recent gains.
DOT posted week-over-week gains of 30.38%, outperforming both Bitcoin’s 4.37% gain and Ethereum‘s 0.55% gain. Polkadot is currently the fourth-largest cryptocurrency by market cap, and currently boasts a market value of $27.31billion.
At the time of writing, DOT is trading for $30, which represents a price increase of 75.42% when compared to the previous month’s value.
DOT/USD technical analysis: DOT’s uptrend continues on strong fundamentals
Polkadot’s steady rise in both volume and price has everything to do with its fundamentals, but its technicals are there to support any price movement as well. The fourth-largest cryptocurrency by market cap is steadily pushing towards the upside and slowly approaching its all-time high of $50.
DOT’s current price movement will most likely lead to the cryptocurrency contesting the $31.33 level once again. In this case, we could call the aforementioned level a pivot point, where a confident break above it would mean a push towards $34 or above. However, failing to break it would most likely mean returning to the $25.75 level, or even contesting the 21-day EMA.
DOT’s RSI on the daily time-frame has been in the overbought territory for a week now, with its current value sitting at 76.19.
Zooming in to the hourly time-frame, we can see DOT’s is quite stable between the $25.75 support and $31.33 resistance levels. On top of that, the 21-hour and 50-hour EMAs play a major role in DOT’s price action, with the 21-hour EMA currently acting as immediate support, and pushing the cryptocurrency up.