As a seasoned researcher with over a decade of experience in the crypto market, I have seen my fair share of bull runs and bear markets. The current situation with Polkadot (DOT) is a classic example of the latter, with the token showing signs of distress after a significant pullback from investors and traders.
Since last month, Polkodot has been experiencing a quieter period as investors and traders are withdrawing from the market. As reported by CoinGecko, the token has seen a decrease of over 16% in the past two weeks alone. Given that bears currently dominate the market, there may be potential threats to Polkodot’s short-term profits.
Although it’s clear that Polkadot remains potent, many users remain uncertain about its longevity and DOT‘s potential to climb in the near future. Low investor trust, coupled with doubts over its key features, could potentially lead to challenging times for Polkadot in the days ahead.
July: A Perfect Month For DOT?
On a recent X post by the official Polkadot account, they shared July metrics for the platform which, all-in-all, showed great growth last month. The platform saw a 1.1k increase in unique voters on the governance side, with over 118 referenda on the platform.
Great weekend read → July ’24: Key network metrics & insights
At a glace, Polkadot had:
The number of OpenGov references (ATH) is showing an upward trend, as indicated by the increase in weekly GitHub commit activities. Additionally, there’s consistent forum engagement and a growth in the number of new users.
See details + get a special look at the Polkadot App
— Polkadot (@Polkadot) August 16, 2024
On Polkadot, there’s a bustling community of developers, contributing around 5,500 weekly commits to their GitHub repository and maintaining over 29,900 repositories. However, it seems that the number of active developers on this platform has plateaued. As per its latest data, the weekly count of active developers remains at approximately 900 since July.
In a post made by Polkadot Head Ambassador Alice und Bob, they detailed a problem that has been plaguing the ecosystem for a while now.
Increased government spending beyond its income results in inflation, as they produce additional DOT currency to cover the shortfall.
To solve inflation, reduce wasteful OpenGov spending. Your tax DOT should be spent well, not poorly.
— Alice und Bob (@alice_und_bob) August 17, 2024
As a crypto investor, I’ve noticed that the escalating inflation we’re experiencing is largely due to the OpenGov overspending their earnings. Instead of tightening their belts, they seem to be compensating by printing more DOT. To combat inflation effectively, it’s crucial to cut back on unnecessary spending by the government. The taxes we pay in DOT should be utilized wisely, not squandered.
A portion of the community believes that OpenGov’s expenditures are questionable and require adjustments to better assist the community. Some have voiced their concerns in response to recent posts on the Polkadot platform.
Polkadot Down From Crucial Support On This Level
In the future, it appears DOT is likely to keep falling due to bears successfully breaching the $4.61 support level that the bulls had been working tirelessly to uphold. This significant breakthrough has created a substantial disadvantage for investors and traders, further fueling doubts within the community and strengthening the overall negative outlook.
Given that the community appears skeptical about the platform, potential investors might interpret this as evidence of weak management or oversight in Polkadot’s governance structure.
For now, supporters of DOT should work on reversing the token’s current trend of decline in the forthcoming days or weeks. If there isn’t a significant improvement in the general outlook for Polkadot within the next two weeks, it’s likely that DOT will face further difficulties as investors and traders look for opportunities elsewhere.
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2024-08-18 02:10