Will Polkadot repeat the “mistake” after upgrading like Ethereum and Cardano?

When founders Gavin Wood and Robert Habermeier announced the eagerly anticipated Polkadot Parachain auctions on October 13, market expectations for DOT soared. That put the price up 22% in less than three days.

DOT. Price chart | Source: Tradingview

According to some analysts, this is just a prelude to the all-time highs (ATHs) that DOT will hit in the coming months.

However, this isn’t the first time altcoin prices have risen in anticipation of investors. Before these upgrades, altcoins tend to see rallies fueled by positive sentiment on social media.

For example, before the upgrade, Ethereum saw nearly 40% growth but started consolidating for a week and encountered resistance at $ 3,300 after the release of EIP-1559 in August.

Price from ETH and ADA together with social media volume | Source: Sanbase

Likewise, Cardano (ADA) achieved a new ATH before the introduction of smart contracts on September 12 amid high social expectations and volumes. However, a week before its release, ADA lost nearly 20% and didn’t see any major gains after launch.

In fact, ADA’s price has fallen since then. At the time of writing, it is trading at $ 2.22, a 26.38% decrease from ATH. Needless to say, this trend is a cause for concern as to whether the DOT will suffer a similar fate.

ADA price table | Source: Tradingview

The fate of DOT could be different

As Polkadot is about to launch Parachain auctions, it seems to be fueling a wave of high social volume. It’s not the main catalyst for altcoins prices, however. With KSM down nearly 68% since its Kusama Parachain auctions were published, there has also been considerable skepticism about the DOT rally.

On October 14th, however, Polkadot Wal and popular community member Donnie BigBags tweet that the Polkadot-Kusama Bridge will be introduced later this year. This makes Kusama “more than just a test network”. It can solve interoperability problems that the Polkadot network has previously faced. This can boost the network, which in turn drives up the price of DOT.

Another trend that confirmed market optimism was that over $ 11 million in short positions were liquidated following the auction announcement. At the same time, DOT’s Open Interest (OI) rose to over $ 950 million.

Source: Coinalyze

The obstacles of DOT are still there

While DOT’s long-term price looks safe, it has seen lower highs for the past three days, increasing the possibility of future consolidation.

However, if the DOT sets a significantly higher level of support, it could act as a good support zone.

Hence, after some consolidation, the chances of a DOT rebound seem certain, especially as Bitcoin and Ether are leading a rally in the market.

However, Polkadot may need a higher volume of trade and a lower social volume in order to recover peacefully.

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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.

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