On Monday, May 30th, Polkadot (DOT) overtook Dogecoin (DOGE) to become the 10th largest cryptocurrency by market value. The success was caused by a rally throughout the past 24 hours that pushed the price of DOT to be nearly 12% higher.
Polkadot, an open-source protocol that connects otherwise incompatible blockchains, has increased in value by 12% since Sunday, climbing from $9.43 to $10.62 at the time of writing, according to the data of CoinGecko.
In relation to the rally, Polkadot’s (DOT) market capitalization also rose, reaching $11.435 billion, surpassing popular meme coin DOGE, the market value of which sits at $11.282 billion at the time of writing.
What Drove DOT’s Price Up?
The increased demand and higher than usual trading volumes witnessed on Friday 27th served to push DOT’s price from lows of $8.56 back up to the $9.3 level, and settling there as the new support zone.
Optimism returned to the asset, enabling DOT to push even higher, while breaking the 100MA at $9.48, and soon after the 200MA at $9.77 on the 1-hour price chart. Keeping up the momentum, DOT broke through the resistance at $10.33 to test highs of $10.62. However, it failed to maintain its position and later dropped back to $10.10 on Monday. If DOT succeeds in breaking through the new resistance of $10.70, then a potential price rally to $14.80 could be on the cards.
Aside from this, DOT’s upturn appears to have been driven by the increasing interest being shown in various protocols operating within the Polkadot ecosystem, many of which generated gains of over 25% throughout the course of the previous week.
One of them, DeFi platform Acala (ACA), has raised $250 million to fund the growth of its stablecoin aUSD. The token’s price spiked 33% within a handful of days, jumping to $0.4457 on Sunday 29th.
Acala, nine parachain teams, and a group of venture funds have launched the $250 million 'aUSD Ecosystem Fund' 🅰️💸— Acala (@AcalaNetwork) March 23, 2022
The fund is seeking early-stage projects from any @Polkadot or @KusamaNetwork parachain with strong $aUSD stablecoin use cases 🚀https://t.co/OJ2V47ZUry pic.twitter.com/NDgLg2bG8N
Astar (ASTR), another protocol built on the Polkadot network, rallied after the announcement of a partnership between its money market, AstridDAO, and Microsoft on May 25th. The value of ASTR shot up instantly, soaring 56% to hit $0.0867. Though the coin later corrected, losing almost all of its gains, its price jumped 16% over the weekend to settle at $0.0663 early on Monday.
Moreover, the first U.S. publicly traded fund to invest exclusively into DOT, the Osprey Pokadot Trust (ODOT), opened trading last week via the over-the-counter market. The move is expected to bring more investors to Polkadot, including the institutional variety.
Adding to all of this, the governance community of Uniswap also voted in favor of deploying a decentralized exchange (DEX) on Polkadot’s parachain, specifically the Moonbeam and Gnosis chains, earlier in May. Uniswap is currently Ethereum’s most popular DEX, and the third-largest DeFi protocol in the sector with $7.04 billion total value locked.
On the Flipside
- The projects built on top of Polkadot (DOT) are growing, and the protocol itself has undeniable real-world value, all of which points to the fact that Polkadot’s potential growth trajectory is immense. However, if DOT fails to break through the $10.70 resistance level, its price could instead suffer further losses down to $8.30 in the short term.