on the crypto
Another completion of the parachain auction did not make investors any more bullish on this top token today.
What happened
The popular Layer 0 Polkadot network (quotation DOT in real time) has been on a pretty rocky ride over the past few months. Today, price volatility continued, with Polkadot down 5,2% in the past 24 hours, at noon ET.
This move comes despite the recent completion of the 15th parachain auction, which was won by Litentry (LIT) with a bid equivalent to more than $ 16 million. Polkadot's parachain auctions continue to inspire bullish interest among some investors, with the completion of such auctions generally seen as a catalyst.
However, today's price action in the broader cryptocurrency sector has been quite bearish. The current macro environment for risk assets is generally seen as unfavorable, with monetary tightening aimed at forcing cheap money out of business seen as a key headwind for projects like Polkadot.
What will happen now?
Polkadot's parachain rods are one of several catalysts that bulls point to as reasons for owning this token. This Layer 0 network, which effectively supports and connects various Layer 1 networks through the development of decentralized applications that use cross-chain functionality, is seen as a building block for Web3. This thesis is one that many cryptocurrency enthusiasts believe will result in a long-term appreciation of the price.
However, since it hit a high of $ 55 last year, Polkadot has dropped to less than $ 18 per token as of today. Many tokens have substantially dropped from their highs; however, a more than two-thirds drop from last year's rally certainly reflects strong bearish sentiment on this token.
The direction of the token
Where Polkadot goes from here remains to be seen. This is a token that I think has enormous potential from here. On the other hand, the broader market sentiment surrounding Polkadot right now is certainly providing difficult headwinds for investors to contest.
Still a top-15 token by market cap, Polkadot's decline has been as incredible as it is evident. Those looking to take an aggressive stance on this large-cap token could be well rewarded. However, it is also understandable why many investors are staying on the sidelines. Right now, I'm content to watch Polkadot's price action from afar.
