Rising trading volume, investor excitement over the upcoming parachain auctions, and the success of KSM have investors looking at DOT as the next altcoin to hit a new high. Layer-one smart contract platforms increased their market share throughout August after the Ethereum network London hard fork did little to solve the major issues of high transaction fees and network congestion.
One top 10 protocol that has been gaining momentum but whose native coin, DOT, has yet to experience a significant price breakout to new highs like some of its competitors is Polkadot, a multichain protocol focused on facilitating the creation of cross-chain bridges between separate blockchain networks.
Data from Cointelegraph Markets Pro and TradingView shows that after bottoming out at $10.36 on July 20, the price of DOT increased 205% to an intraday high at $31.70 on Tuesday as the chatter of an impending alt season begins to rise. Three reasons for the increasingly bullish outlook for DOT are its upcoming parachain auctions, a rapidly growing ecosystem of projects interested in launching on the network, and a steady increase in daily trading volume.
One of the biggest drivers of momentum for the Polkadot ecosystem is the upcoming parachain auctions where projects vie for community votes to obtain one of the limited slots available to launch on the network. Polkadot’s “wild cousin,” Kusama, has been in the process of conducting its auctions, with the first batch having been chosen at the end of July and the second batch of auctions scheduled to begin on Wednesday, Sept. 1.
As part of the parachain crowdloan process, users vote for projects by locking up DOT tokens for a designated term as a way to bootstrap funding for projects that are chosen to fill one of the limited slots.
This has the effect of reducing the circulating supply of tokens available, adding pressure on the price of DOT. The Polkadot network will undergo its own parachain auctions once all auctions are complete on the Kusama network. The process has been fully audited, and to date, the Kusama-based parachains are running smoothly.
Another reason for the recent strength of DOT is the large number of projects interested in obtaining a parachain slot and launching on the network. As evidenced by the graphic above, the Polkadot ecosystem has seen extensive growth in terms of protocols and supporting infrastructure over the past year, and this is outmatched by only a small number of competing networks in the space.
With the Polkadot parachain auctions expected, it’s likely that the ecosystem will continue to expand and welcome new projects, and proof of this comes from the fact that the Kusama parachain process has thus far been relatively smooth.
A third reason for the bullish outlook for DOT has been its surging 24-hour trading volume, which is now back at levels not seen since the market-wide sell-off in late May. According to data from CoinMarketCap, DOT’s 24-hour trading volume surged more than 300% on Tuesday to a high of $5.41 billion as anticipation for the upcoming Kusama parachain auctions excited Polkadot investors who view KSM’s success as a proxy of what can occur with DOT’s price.
If the Kusama network can continue the smooth rollout of its auction process and clear the way for the process to begin on the Polkadot network, the demand for DOT could rise, and this could translate to higher prices for the asset.
|#||Crypto||Prediction||Accuracy||CVIX||Price||24h||7d||Market Cap||7d price change|
|1||BTC||Bitcoin predictions||70.8%||54||$56 409.75||0.06%||-2.61%||$1 065 549 908 073|
|2||ETH||Ethereum predictions||78.8%||32||$4 502.38||0.10%||1.67%||$533 908 042 006|
|3||BNB||Binance Coin predictions||82%||34||$613.96||0.16%||-1.92%||$102 409 523 073|
|4||USDT||Tether predictions||90.8%||1||$1.001459||0.11%||0.10%||$74 211 260 312|
|5||SOL||Solana predictions||73.2%||59||$230.69||2.82%||12.10%||$70 507 890 122|
|6||ADA||Cardano predictions||64.8%||75||$1.68||9.42%||2.11%||$56 038 092 489|
|7||XRP||XRP predictions||64.8%||71||$0.970535||0.13%||-6.02%||$45 855 154 609|
|8||USDC||USD Coin predictions||94%||2||$1.001277||0.27%||0.17%||$39 103 668 339|
|9||DOT||Polkadot predictions||65.2%||77||$35.59||1.24%||-7.80%||$35 145 425 116|
|10||DOGE||Dogecoin predictions||59.2%||80||$0.207628||1.70%||-4.69%||$27 481 399 440|
|11||LUNA||Terra predictions||67.6%||68||$66.93||5.65%||52.44%||$25 971 315 011|
|12||AVAX||Avalanche predictions||62%||75||$106.73||-8.36%||-7.72%||$23 904 356 191|
|13||SHIB||SHIBA INU predictions||63.2%||78||$0.000041||-1.75%||1.32%||$22 616 002 259|
|14||CRO||Crypto.com Chain predictions||60%||89||$0.688991||-2.59%||-6.99%||$17 405 985 331|
|15||MATIC||Polygon predictions||71.6%||63||$2.11||0.94%||13.42%||$14 799 705 460|
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