It is relatively difficult for the market to focus on developments in the crypto space rather than price speculation. However, this has not stopped networks like Polkadot from going full steam ahead towards their WEB3 vision. In fact, a recent update highlighted a busy period for the network, so here’s what we can expect.
Polkadot has just confirmed the launch of the next parachain lease auction. The announcement also confirmed that several governance events are planned for August. Combined, these events may increase the demand for DOTs. This is because of the lock-up period associated with governance and parachain auctions.
The next parachain lease auction will start today at block 11_473_600. https://t.co/hyZxkUHOXw
— Bill Laboon | W3F (@BillLaboon) August 5, 2022
As far as the price action of DOT is concerned, the trading volume of the cryptocurrency has increased significantly. It is now one of the top 10 cryptocurrencies by trading volume, according to WhaleStats.
Spy on the top 100 whales here: https://t.co/f4ZJg8SIWe
— WhaleStats – BSC Rich List Top 1000 (@WhaleStatsBSC) August 6, 2022
Now, it is unclear whether the higher transaction volume is directly related to the announcement of the parachain rental auction. The underlying mechanism requires projects competing for parachain slots to hold a significant amount of DOT in order to have a chance to win the parachain.
What does the chart show?
DOT rose more than 9% this week. This rise led to a retest of its short-term resistance line near the $9 price level.
Although the upside has been shortened following a retest of the resistance line, the resulting downside is limited. Investors may choose to keep their DOTs, especially given the scheduled developments in August. Another possibility is that healthy demand for DOT around its press time levels may be offsetting most of the selling pressure.
A bearish pullback is expected after a retest of resistance. In addition to lower bearish pressure, DOT’s weighted sentiment suggests more upside is possible. In fact, a small pullback has pushed weighted sentiment back into negative territory (-0.52) at press time.
Additionally, Polkadot has seen a significant increase in developer activity contributors since the beginning of August. This is in line with DOT’s planned development this month. This is a confidence boost, especially for long-term DOT investors.
Polkadot’s August schedule is healthy for the network and DOT’s price action. It may encourage favorable investor sentiment, but the outcome will also contend with current market forces.