DOT is up 50% in one week and it outpaced Ethereum after undergoing an extreme rally over the past week as we are about to read more in today’s Altcoin news.
While Polkadot’s native token got down by 10% on the day, DOT is up 50% in the past week after undergoing the rally when it outpaced Ethereum and almost all larger-cap altcoins. DOT is now the sixth biggest crypto by a market cap having moved above Bitcoin Cash. DOT had a market cap of around one-tenth of the one of Ethereum which could be a validation that Polkadot could be seen as a competitor to Ethereum.
DOT ripping its way into the top five by market cap and has now almost doubled over the last month. 📈 pic.twitter.com/3qO5g1xhhO
— Wilson Withiam (@WilsonWithiam) January 1, 2021
DOT is up by 50% in one week as it outpaced other cryptocurrencies in the top 20 by market cap. BTC is up by 20% in the past week and ETH is up by 17% thanks to the extreme rally over the past few days. Most other crypto assets are in the top 20 and are down with the falling capital being focused on a few performers. Before the ongoing push higher, the crypto formed a triangle that signaled a break higher. Wilson Withiam from Messari explained that the ongoing price action of DOT could be related to its underlying blockchain:
“Recent market sentiment aside, Polkadot and Kusama are drawing closer to the arrival of parachains, which could be improving its near-term outlook. Right now, Polkadot is a staking and governance chain. Parachains should differentiate it and drive DOT’s intended utility.”
Parachains are a technology that allows developers to deploy and allow users to use applications based on the DOT technology and many think that because of this the platform will gain traction as a potential ETH competitor which has long reigned over the world of Defi and Smart Contracts. Bobby Ong of CoinGecko said that DeFi applications could migrate to other layer one platforms just like Polkadot:
“We will see existing DeFi apps launching on other Layer 1 platforms like Serum & Polkadot. Hard for me to imagine any other L1 platforms gaining a foothold. We will see a multi-chain Metamask-like wallet making it easier to connect to multiple blockchains.”
What’s important to outline is that there are parachains which are needed for this to work. The data also indicated that there was a large increase in the amount of Polkadot developers which only boosts the outlook.
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