Polkadot can last forever, but should you accumulate it now?
Polkadot is applying as a single proof-of-stake blockchain that can provide interoperability between other blockchains. In fact, many consider polkadot to be one of the most valuable projects in the crypto space right now.
It is therefore not surprising that analysts keep a close eye on the performance of the DOT.
Renowned analyst Benjamin Cowen has provided a reality check of the latest altcoin price movement. DOT has taken a big blow lately that sent it into a big price correction. It’s worth noting, however, that Cowen began his analysis by recognizing an important aspect of owning top altcoins. According to him, most altcoins can (in theory) offer higher returns, but investors should protect themselves from buying altcoins near their ATH.
While many wonder which altcoins will survive the next few years, Cowen remains optimistic about Polkadot’s odds.
“I think DOT is here to last.”
DOT / USD
Weekly DOT / USD Chart | Source: Benjamin Cowen
As early as August 2020, DOT was listed on various stock exchanges. Accordingly, DOT spent a lot of time in the accumulation phase and exploded heavily after breaking over this area.
While this altcoin hit its all-time high a few months ago, the same valuation is down 69% at press time.
So the question is: When does it make sense to start accumulating again?
“It’s hard to tell just looking at the DOT / USD chart.”
In the past, this altcoin was closely correlated with bitcoin. Therefore, Cowen thinks it makes more sense to use the DOT / BTC chart here.
DOT / BTC daily chart | Source: Benjamin Cowen
If we just look at Bitcoin’s current price history, we can see that its continuation below the 20-week SMA could make things questionable for the altcoin market. Based on the attached table, Cowen found:
“With BTC breaking and holding below the 20-week SMA, it’s no exaggeration to say the altcoin market is getting riskier.”
BTC / USD weekly chart | Source: Benjamin Cowen
So, should I be accumulating DOT right now?
“They assume that BTC is at its lowest point,” he said. Consider May – Bitcoin’s correction this month also has a direct impact on DOT price. The accumulation of DOT at this point in time is basically speculation based on the premise that BTC has bottomed out.
Additionally, while “Bitcoin hasn’t received any updates or done anything remarkable in the past 2 months” and has been trading sideways lately, what has changed is that the price of DOT continues to fall against Bitcoin, even though it is still trading at the same price as it arrived 2 months ago.
However, there is a lot more to be said about DOT based on its table with ETH.
DOT / ETH
DOT / ETH daily chart | Source: Benjamin Cowen
According to the graph, the conclusion that can be drawn is that “the pair fell to this level in August 2020, then January 2021, and now”. More:
“The DOT / ETH pair is at an all-time low, which has triggered major rallies in history.
According to Ambcrypto