During much of October, the cryptocurrency market was optimistic, but it has since fallen in the previous two weeks. Polkadot has recently found its footing, and it is currently the most bullish crypto, so let’s take a look at what’s going on with it and where it’s headed.
The impending Polkadot parachain auction has been the primary driver of this optimistic trend. Polkadot is getting ready to hold its inaugural parachain auctions on Monday. At the time of writing Polkadot is trading at $52.84.
Polkadot to break out soon?
Polkadot (DOT) is undergoing price discovery on the heels of the highly anticipated parachain auctions, according to popular crypto analyst Benjamin Cowen.
Cowen claims that DOT is likely to break out of a large range that it has been stuck in for the majority of 2021 in a new strategy session.
Right now, the price is rising in anticipation of [parachain auctions]. A variety of projects would like to be featured on Polkadot. Unlike Ethereum, where any ERC-20 token may be created instantly, Polkadot requires you to participate in an auction. Polkadot is only available to individuals who win those auctions in the end.
“At some time, whether it’s now or a few months from now, we’ll absolutely endure when we break out.” Polkadot is a good project, and I have big expectations for it as we move through this market cycle.”
Cowen examines DOT’s valuation versus Bitcoin (DOT/BTC) and Ethereum (DOT/ETH) to get a sense of how high it could go this cycle.
When it comes to Bitcoin’s value, it’s still not at an all-time high.” In order for DOT to reach a new all-time high against Bitcoin, it would have to rally another 24% or 25% from current levels. Polkadot would rise to around $62 or $63 if Bitcoin remained stable.
For Ethereum, DOT/valuation ETH’s would have to rise another 117 [to] 120 percent from its current level to reach an all-time high. To reach a new DOT/ETH all-time high, we’d need to get to $111 for a constant ETH… that means Polkadot.
Cowen believes DOT will remain strong as long as Bitcoin is above the bull market support zone, which is made up of the 21-week exponential moving average (EMA) and the 20-week simple moving average (SMA).
“DOT’s going to have a very bright future ahead. The main thing now is just to make sure Bitcoin stays relatively healthy.
As long as Bitcoin is above the bull market support band, I think the general direction for DOT should be up, even if it does have some shakeouts along the way.”