Polkadot continues to be the most developed network, but what’s up with DOT price?

An Introduction to Polkadot

Polkadot continues to be the most developed network, but what’s up with DOT’s price?

Polkadot is one of the most successful project within the DeFi space, mainly focused on specific applications rather than generalized infrastructure. The architecture of the Polkadot chain is divided into Parachains & relay chains, both working on a nominated Proof-of-Stake algorithm.  Both chains work independently but are bound to each other and serve as a governance layer of the network. 

The network’s bridge allows different blockchains to interact with each other and enable data transfer among them. The platform is powered by its native token DOT which is also used for governance and earning rewards by staking.

Recent Updates:

• Polkadot records the largest developer ecosystem after Ethereum, with more than 3x commits than the next blockchain, Cosmos
  

  Polkadot still has the largest active developer ecosystem outside Ethereum, with almost 3x more weekly commits than the next largest ecosystem according to @MessariCrypto.

  Shout out to the devs that actively contribute to making Polkadot's multichain vision for Web3 a reality. pic.twitter.com/r9lNDwZJk0

  — Polkadot (@Polkadot) October 3, 2022

• Even according to data from Santiment, Polkadot’s Github repository remains the most active with regards to notable active development with 538 submission recorded per day!
  

  🧑‍💻 #Polkadot's and #Kusama's shared #github repository continue to be the most active in regard to notable active development, with 538 submissions recorded per day. #Ethereum, #Cardano, and #Status currently round out the top five. https://t.co/fvVUKEYPgY pic.twitter.com/uGC5bmvmHX

  — Santiment (@santimentfeed) October 12, 2022

• Bitgreen, the multipurpose, open & permissionless blockchain, recently won Polkadot’s 29th parachain auction
  

  Congratulations to @Bitgreen_ on winning Polkadot's 29th parachain auction!

  Bitgreen is building a permissionless blockchain to bring together DeFi & Web3, with a focus on green projects, renewable energy tech, microfinance & impact investing. pic.twitter.com/XCkRD3gVC3

  — Polkadot (@Polkadot) October 12, 2022

Technical Analysis of Polkadot(DOT)

DOT/USD | Source: Tradingview

• Polkadot price broke down from the crucial support levels and reached a 20-month low after hovering within very narrow ranges for nearly a month
• Numerous outside factors are thought to have fueled the bearish action and may cause it to drop to the bottom
• While the RSI is about to enter the oversold area, AO continues to remain more or less stagnant
• A continued bearish action may compel the price to drop below $5 initially. If the bulls fail to hold the price above these levels, then an extended bearish action may drag the price close to $4.5
• However, a rebound may still be in place that could be triggered as the price reaches the levels around $5.5

Additional Read: Polkadot Price Prediction

With the technicals out of the way, let’s take a look at a few on-chain metrics pertaining to Polkadot (DOT).

DOT sees sustained Development Activity

DOT Development Activity | Source: Santiment

The development of any project is often used as an indicator of the platform’s success as it embraces the team’s dedication to building a strong & reliable product. Presently, Ethereum has the highest development activity, and Polkadot ranks second. The developers build applications over the existing blockchain, handling the front-end, and back-end development & maintenance. 

The development activity maintained a significant upswing ever since the project began to function. The developer’s count also was on rising considerably that reached a peak of more than 70 contributors a day. As a result, it is anticipated that the DOT price will benefit from the increased development activity.

Read more: Ethereum price struggling despite ETH supply turning deflationary

Futures Funding Rates

DOT Funding Rates | Source: Santiment

The funding rates help to keep the price in sync as the payments are made between the market participants and the future markets in a fixed interval of time. If the funding rate is positive then the price of the perpetual contract is higher than the marked price. Moreover, if the rates are negative, then the shorts are said to pay for longs.

The Binance funding rates have been largely trading within the positive ranges while the FTX maintained a negative trend. While both trades are slowly sliding to the negative ranges, it appears that the marked price is rising compared to the perpetual contract, hence indicating a bearish trend since short traders have to pay to keep holding on to their position.

Conclusion

Despite the Polkadot chain having been marking new highs in terms of network upgrades & development activity, the DOT price remains largely unaffected. The recent drop from the pivotal zones signifies that the bulls are currently extremely exhausted & also sceptical about the upcoming market trend. 

Meanwhile, the rise in development activity signifies the growing strength of the project. Hence with slight ease in the market sentiments, may ignite a notable bullish trend in the upcoming days. 

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Prices as on 13 October, 2022.