Polkadot: Can this metric aid with DOT price prediction

Journalist

Posted: December 16, 2023

• DOT was down by greater than 3% within the final 24 hours alone.
• Liquidation was excessive, and market indicators seemed bearish.

Polkadot [DOT] has maintained its streak of sitting on prime of the record of key metrics that signifies the diploma of decentralization. This may typically be perceived as a constructive replace, and the blockchain expertise’s core worth is decentralization.

However will this be sufficient for the token to register positive factors on its worth chat?

Polkadot is getting extra decentralized!

Polkadot Insider lately posted a tweet highlighting the blockchain’s nakamoto coefficient.

For starters, the metric signifies the minimal quantity of labor required to disrupt any particular blockchain. Each time the metric will increase, it clearly signifies that it’s harder to interrupt a blockchain, making it extra decentralized.

RANKING BLOCKCHAINS BY NAKAMOTO COEFFICIENTS SCORE IN 24 HOURS

On Proof-of-Stake networks, the Nakamoto Coefficient quantifies the minimal entities wanted to manage one-third of the stake

The upper the Nakamoto Coefficient on a community, the extra decentralized a… https://t.co/mKW8zAukaM pic.twitter.com/rTzxmJQ121

— Polkadot Insider (@PolkadotInsider) December 15, 2023

Coming again to the tweet, Polkadot Insider revealed that DOT’s nakamoto coefficient stood at 92. This was commendable, as again in April 2023, DOT’s metric was solely at 70.

Aside from DOT, different notable blockchains that made it to the record embody Mina Protocol [MINA], THORChain [RUNE], Avalanche [AVAX], and Solana [SOL]. Nevertheless, decentralization alone may not be sufficient for DOT to make its traders worthwhile.

DOT’s bears have buckled up

Like a number of cryptos, DOT has additionally witnessed a worth correction within the latest previous. To be exact, within the final 23 hours alone, the token was down by over 3%.

As per CoinMarketCap, on the time of writing, Polkadot was buying and selling at $7.13 with a market capitalization of over $8.9 billion.

To see what went fallacious, AMBCrypto took a have a look at the token’s liquidation ranges.

Upon checking, we discovered that DOT didn’t go above a key resistance degree within the latest previous. The token skilled a considerable hike in liquidation when its worth reached $7.77, which resulted in a worth correction.

It is going to be attention-grabbing to look at when the market revives and the way quickly DOT will be capable to go above that degree.

Supply: Hyblock Capital

Due to this fact, AMBCrypto checked DOT’s every day chart to grasp what to anticipate from Polkadot within the close to time period. Polkadot’s MACD displayed the potential of a bearish crossover quickly.

Learn Polkadot’s [DOT] Value Prediction 2023-24

Its Cash Move Index (MFI) additionally registered a slight downtick from the overbought zone, which means that promoting strain on the token was excessive. 

The potential for an extra drop in worth was identified by one other indicator. DOT’s worth touched the higher restrict of the Bollinger Bands, which typically ends in a worth correction.

Supply: TradingView