DOT Hits Nearly Three-Year Low, Web3 Foundation Goes All-Out to Save Polkadot
On October 10th, Web3 Foundation, the developer of Polkadot, announced a new initiative to deploy approximately CHF 20 million (around $22 million) and 5 million DOT coins (approximately $19 million), with a total value of approximately $41 million, to support teams and individuals developing on the Polkadot blockchain network.
Web3 Foundation attributes the success of network development to the Polkadot community, hence placing great importance on enhancing the community governance financing mechanism of the Polkadot Treasury to support projects that contribute to the network. The aforementioned funds will be deployed throughout 2024.
In terms of community-driven development, Polkadot's parachains have been one of the earliest and most successful projects in the network. However, the bearish market conditions over the past month have not been favorable for parachains. The total value locked (TVL) of projects such as Acala, Moonbeam, and Astar has dropped by 9% to 22%.
Polkadot Parachain TVL
The price of Polkadot has been in a downward trend for some time, hitting new lows for the year in the past 48 hours. Earlier this month, after failing to break above the 50-day exponential moving average (EMA), the token lost over 10% of its trading value, changing hands at $3.81.
What's worse is that the bullish momentum has turned bearish, with the MACD indicator forming a bearish crossover (death cross) this week. This development suggests that the downward trend may continue, potentially leading to a three-year low for DOT at $3.63, a level last seen in October 2020.
【DOT/USD Daily Price Chart, Source: TradingView】
Nevertheless, the actions taken by the Web3 Foundation could serve as a positive trigger for parachains and the price of Polkadot. If the Polkadot price successfully rebounds from the key support level of $3.63, it may initiate a recovery due to the aforementioned developments in the broader network.
It is crucial for DOT to reclaim the support level at $3.9 to transform the 50-day moving average into a support level and invalidate bearish arguments, breaking above $4.00.
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