Polkadot (DOT) becomes the most decentralized blockchain, but its price action continues to remain bearish.
DOT’s price chart remained red, but there were chances of a trend reversal.
Polkadot [DOT] recently reached a new milestone that reflected the reliability of transparency on the blockchain. Though this achievement was commendable, it didn’t have a positive impact on the token’s price as its daily and weekly charts were painted red.
Polkadot’s New Milestone
Polkadot Insider, a popular X handle that posts updates related to the blockchain’s ecosystem, revealed that DOT ranked #1 on the list of blockchains by average Nakamoto coefficient.
TOP 10 BLOCKCHAINS BY THE AVERAGE NAKAMOTO COEFFICIENTS
The Nakamoto Coefficient presents the minimum entities needed to control one-third of the stake
The higher the Nakamoto Coefficient on a network, the more decentralized a blockchain, which means the more resilient the… pic.twitter.com/izKlRSWeYx
— Polkadot Insider (@PolkadotInsider) May 31, 2024
For starters, the Nakamoto Coefficient presents the minimum entities needed to control one-third of the stake. The higher the Nakamoto coefficient on a blockchain, the more decentralized it is.
Apart from this, Polkadot’s performance on the development front also remained commendable throughout the last week.
Bitcoinworld’s look at Santiment’s data revealed that DOT’s development activity surged sharply. On top of that, the blockchain’s dev activity contributor count also increased multiple times over the past seven days.
DOT Under Bears’ Influence
However, none of this was enough to get rid of the bears, as the token’s price dropped last week.
According to CoinStats, DOT’s price has dropped by 1% in the last seven days. At the time of writing, Polkafot was trading at $6.99 with a market capitalization of over $10 billion.
A major reason behind this sluggish performance could be the current market condition, which has caused several coins’ graphs to turn red.
Apart from that, AMBCrypto found that DOT’s funding rate increased last week. Generally, prices tend to move in the opposite direction from the funding rate.
Nonetheless, things might change soon as investors’ confidence in the token improves slightly.
Bitcoinworld’’s analysis of Santiment’s data revealed that after a drop on the 28th of May, DOT’s weighted sentiment once again went into the positive zone.
This meant that bullish sentiment around the token increased. But, its social volume declined, reflecting a decline in popularity.
The chances of a trend reversal also seemed likely, as a key technical indicator looked bullish.
Polkadot’s Chaikin Money Flow (CMF) registered an uptick from the neutral mark. At press time, it had a value of 0.06, hinting at a price increase soon. But the Relative Strength Index (RSI) remained bearish as it went southward.
Bitcoinworld’ then analyzed Hyblock Capital’s data to look for possible targets if DOT’s price action turns bullish. As per our analysis, if DOT turns bullish, investors might witness it go above $7 once again as liquidation would rise to $7.5.
However, if that doesn’t happen, then DOT’s price might plummet to its support level of $6.92.
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