Polkadot price prediction: DOT is on the cusp of a major breakout
The Polkadot price is hovering near the highest point on May 17th as investors anticipate the upcoming parachain auctions. The DOT token is also rising as investors react to the new $775 million development fund. It is trading at $41, which is about 292% above the lowest level in July this year.
Parachain auctions and new grants
The biggest driver for the Kusama and Polkadot prices in the past few weeks has been the upcoming parachain auctions. These auctions are an integral part of Polkadot’s goal of building a sharded ecosystem.
The participants will be competing to earn a slot of the 100 available slots that are available. They will also receive funds to build their blockchain networks. In the previous parachain auctions, the five winners were Karura, MoonRiver, Shiden, and Bifrost Finance. At the time, Karura won 500k KSM, which are currently valued at more than $184 million.
Meanwhile, in a statement, Gavin Wood, Polkadot’s founder, said that the network had allocated about 18.9 million DOTs for development purposes. Going by the current price, this amount is worth more than $775 million. He also added that the funds will go towards building, improving, and educating on the Polkadot’s unique ecosystem.
In a reply to the statement, Wood noted that these DOTs come from network fees, slashes and suboptimal staking. He added that the unused DOTs are subjected to what is known as burning. About 239,388 DOTs are burned every week.
Poldaot price prediction
The Polkadot price has been in a major bullish trend in the past few weeks. It has outperformed most of its peers, including Bitcoin, Ethereum, and Cardano.
On the daily chart, the coin has moved above the 25-day and 50-day exponential moving averages. It has also moved above the key resistance level at $38.70, which was the highest level on September 14th. The coin had struggled to move above this level several times before.
At the same time, it is approaching its all-time high of almost $50. Therefore, the DOT price will likely continue rising as bulls target the psychological level of $50. This trend will continue towards the start of the parachain auctions in November.