Polkadot Crowdloan auction starts as DOT price eyes 22% upswing

Polkadot price witnessed a massive downswing yesterday as it failed to close above a crucial resistance level. This development came when the general cryptocurrency market was due for a correction.

Going forward, investors can expect DOT to rally beyond the supply barrier mentioned above and set up a new swing high.

Crowdloan facility hits DOT and KSM

Polkadot recently saw a vote to increase the validator count for its blockchain from 300 to 399 but failed to garner enough votes to be passed. This week, however, the staking rate on Polkadot has increased by 2% from 59.7% to roughly 61.2%, suggesting an increased interest.

Interestingly, the staking rate for the Kusama network is relatively lower than DOT despite having a higher payout percentage.

Polkadot provides stakers a 13.47% annual reward, while Kusama offers an annual interest rate of 14.74%.

Another major development is the “parachains slot auctions,” a method in which projects wishing to obtain a parachain slot need to participate in auctions by locking up their DOT and KSM tokens via the Crowdloan mechanism.

The projects that do not win the auction will receive their locked tokens in runtime.

The announcement details,

In technical terms, the DOT or KSM are allocated to the auction for the parachain by the runtime logic of the chain using the “crowdloan.contribute” extrinsic. This is a special type of transaction that allows token holders to contribute to a crowdloan without having to transfer or give up custody of their tokens to any third party.

The first batch of Crowloans, although on the Kusama network, have already begun. The next set of auctions will start on September 1.

Polkadot price restarts a new leg-up

Polkadot price dropped roughly 15% as it slid from $28.21 to $24.10 on August 24. This downswing stabilized above the 70.5% Fibonacci retracement level at $25.06 and is already seeing a bullish reaction from it.

A continuation of this uptrend will lead to a retest of the 50% Fibonacci retracement level at $26.32. If the buying pressure pushes DOT to produce a decisive 4-hour candlestick close above it, it will confirm the start of a new uptrend.

In such a case, Polkadot price will target the $30 psychological level. A flip of this barrier into support will open the path to retest $31.38.

DOT/USDT 4-hour chart

On the other hand, a breakdown of the 70.5% Fibonacci retracement level at $25.06 will indicate weakening buying pressure. If the selling pressure pushes Polkadot price below the $24.08 support level, it will open the path to retest the range low at $23.25.

However, a breakdown of $23.25 will invalidate the bullish thesis and trigger a potential crash to $20.61.