Parachains are a growing concept in the digital currency ecosystem with the Kusama blockchain coming off as the main pioneer of this model.
The price of Polkadot (DOT), an open-source sharding multichain protocol with parachain functionalities, has soared to a new All-Time High (ATH) of $53.25 today, riding on an extremely bullish momentum picked up from mid-October. At the time of writing, Polkadot is changing hands slightly below the ATH at $52.21, however, it is still up by 15.25% in the past 24 hours.
The growth of Polkadot models the general trend that is observable amongst the top digital currencies around. Bitcoin (BTC) notably led the rally, recording a $66,930.39 ATH about 2 weeks ago. Ethereum (ETH), Solana (SOL), and memecoin Shiba Inu (SHIB) have also printed a new high in the past month, re-affirming that retail interest in digital currencies, irrespective of the categorization, is not waning anytime soon.
At its ATH, Polkadot is now on track for new price discovery, and there is a certainty a successful close above the key support level point of $48 will chart the price surge toward the $70 benchmark. Technical indicators and price-performance metrics are somewhat antagonistic to the likelihood of the digital currency soaring to these unprecedented levels in the short term.
Besides the herd psychology that will make people start taking profits on their DOT tokens en masse as we may begin to see in the coming days, the coin’s Relative Strength Index (RSI) is currently at the overbought zone, and this only connotes one thing, a bearish price reversal.
For its limited token supply, recognition amongst related crypto projects, and ecosystem functionality, many currently consider DOT as an undervalued token, and this coupled with other factors remains the reason why both retail and institutional investors are throwing their weight behind the network.
Polkadot Parachain Anticipation
On October 13, Parity Technologies, the tech company that developed the Polkadot blockchain revealed that its Council has consented to the launch of parachains on the protocol subject to the community’s approval. The anticipation for this parachain launch, a tech model that seeks to enhance interoperability and speed amongst blockchains is already steaming up, adding to the accumulation of DOT tokens before it inevitably gets expensive.
Parachains are the diverse individual layer-1 blockchains that run in parallel within the Polkadot ecosystem. The central network is dubbed the relay chain, and it contributes security, scalability, interoperability, and governance of Polkadot to all the protocols joined with it. In turn, the smaller networks leverage the ecosystem depth and other superior fundamentals that the Relay Chain has to offer.
Parachains are a growing concept in the digital currency ecosystem with the Kusama blockchain coming off as the main pioneer of this model. Projects bid in order to be considered as a part of the chain and the bidding process is often conducted with a large quantity of the relay chain’s native token being held by those seeking inclusion. The broad fundamentals stirred up the massive buyup of the DOT tokens.
Should all things go as planned, applications for the Polkadot parachains are set to commence by November 5.
Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
