- After a period of correction, the Polkadot price shows signs of an upward trend of 132%.
- DOT technology is implemented with Effinity to bring NFT and gaming under one roof.
- A collapse of the August 26 swing high at $ 23.45 will invalidate the bullish thesis.
Polkadot price experiences a sudden downturn as important sell signals emerge across multiple time frames. While the near-term outlook looks bearish for the future, things are looking up for DOT.
Efinity to take gaming and NFTs to a new level
Non-fungible tokens (NFTs) were quite a buzzword after being launched in 2021. The hype even got big traditional market players like Sotheby’s to jump on the NFT bandwagon and sell the Bored Apes collection for a whopping $ 24.4 million on September 9th.
Additionally, the world’s largest museum, State Hermitage, raised $ 440,000 via an NFT auction on Binance’s NFT platform on Sept. 7. The excitement surrounding NFTs is undeniable, this is just the start considering how NFTs are making their way into the gaming ecosystem.
The most relevant example of this is the Axie Infinity game, which uses NFTs in the game and has a marketplace around it. Still, the Efinity blockchain is trying to take this to the next level.
Effinity is a purpose-built blockchain developed by Polkadot with substrate development support from Parity Technologies. In fact, it is a cross-chain token connection to allow the widespread adoption of NFTs.
End users don’t even need to create a MetaMask wallet or hold ETH in it to access their NFTs. In fact, users can move their NFT holdings from one blockchain to another. Efinity selected Polkadot among other networks such as Near, Flow and Cosmos because of its customizable function. In a recent interview with Crypto.Com, Enjin CTO Witek Radomski stated:
Polkadot is actually ideal for what we’re trying to build. We are trying to place NFTs as native / main tokens on the network. With Efinity we can easily eliminate friction points … people can start playing a game and basically receive, send, and create NFTs and they won’t even know they are using polkadot.
In addition, Radomski said they want to be a platform that enables people to use NFTs interactively, no matter what chain they are in, without requiring users to leave the gaming experience to access their NFT collections.
Given the huge size of the gaming industry, the mainstream penetration of the NFT into this ecosystem will be enormous. As Polkadot will power these use cases, this development will massively increase its fundamental value, reflecting its market value in the days ahead.
Polkadot price predicts a massive upturn
The Polkadot price has created two swing lows and a group of swing highs since late December 2020. The connection of these swing points with trend lines shows the beginnings of an ascending parallel channel lasting several months.
Although the DOT recently broke the channel’s centerline, it has yet to hit a second high at around $ 50.
Investors should watch out for the Momentum Reversal Indicator (MRI), which has shown a sell signal in the form of a red “two” on the 3-day chart. This technical pattern predicts a one-to-four candlestick correction.
A warning signal in the form of a yellow downward candle is also forming on the weekly chart. This development suggests that a continuation of the uptrend will result in a sell-signal in the weekly timeframe.
Both sell signals, while bearish, are from a short-term perspective and are unlikely to result in a massive decline given the bigger outlook. The correction could push the DOT price to $ 31.97 and, in the worst case, retest the $ 27.68 level.
Once you get that pullback behind you, buyers can start a new uptrend. The first immediate resistance level hindering the rise in buying pressure is at $ 35.13, but breaking that barrier will propel the DOT to $ 43.64 after rising 23%.
If buyers manage to hit a crucial daily close above $ 43.64 after this uptrend, the polkadot price will mark the psychological level of $ 50 and coincide with the upper trendline of the parallel channel.
This is where DOT bulls will face a critical decision. If the buying pressure manages to flip the resistance trendline into support, the path will open for the second leg of the rally to the 161.8% Fibonacci retracement level at $ 73.81. This move will set a new all-time high for DOT, representing a 132% increase from the $ 31.97 support floor.
DOT / USDT 3-day, 1-week chart
On the flip side, if the polkadot price does not stay above the USD 27.68 support level, it indicates weakness in buyers and increased selling pressure. However, a convincing daily candlestick close below the August 26 swing low at $ 23.45 will invalidate the bullish thesis.
If so, in a sharp bearish case, DOT could go further down and retest the lower trendline of the parallel channel at $ 10.96.