The Polkadot (DOT/USD) ecosystem is growing, and you could be wondering whether it is time to buy the token. In our previous CoinJournal report, we highlighted how Polkadot is growing in importance in allowing blockchain connections. With that in mind, the Polkadot token is worth exploring if you seek a cryptocurrency likely to return big. But is it at the moment?
A November 14 Dot Insights data indicated that the total number of daily new accounts on Polkadot increased almost 10 times. The growth has happened in just two weeks, while the active accounts have surged 4 times. The rise has been attributed to liquidity outflow from centralised exchanges. The growth in activity on Polkadot underlines a growing influence of the blockchain.
In case you missed it, the Polkadot token is software, not security. You already know all the hullabaloo of XRP being classified as a security and the already ensuing legal battle. After years of consultation and negotiations, DOT was recognised as a non-security earlier this month. That makes the token compliant within the “Investment Contract” framework of classification of digital assets. At least, it gives the relief that the blockchain will not run into battles with the regular like the SEC.
Clearly, November could be a good month for the Polkadot token. But with the FTX concerns lingering, how is the cryptocurrency fairing?
DOT faces resistance as the price recovers from the $5.3 level
DOT recently claimed a new low for the year at $5.3. The token trades at $6.00, underlining an improved sentiment around the token.
The momentum indicator is bearish, although the weakness has slightly subsided. With the improved outlook, DOT will potentially proceed higher to find resistance around or at $6.4.
Should you buy DOT now?
The general trend is bearish for the Polkadot token. Although we expect the price to find some footing in the next few days, the risk-reward ratio to the resistance level is unattractive.
DOT must find a directional momentum to the upside to consider a buy. Still, the token is attractive for long-term buy-and-hold.