Polkadot (DOT) price has moved 5% lower to erase earlier weekly gains and trade in the red. The price action is now approaching the buy zone.
Fundamental analysis: Polkadot rolling out a DeFi Alliance
Polkadot is looking to grow its ecosystem, with the rollout of a new DeFi Alliance and a new support program for validators. The sharding multi-chain protocol is now the latest Ethereum rival to announce a DeFi alliance.
The aim of Polkadot’s upcoming alliance is to change its decentralized nature and offer a platform on which users will be able to utilize the Polkadot Network and its Substrate technology stack for decentralized finance.
“Chainlink is excited to help steer the direction of Polkadot’s growing ecosystem of decentralized financial applications. By promoting developer best practices for DeFi protocols, the Polkadot ecosystem can become stronger than ever,” said Dan Kochis, Chainlink’s global helm of business development.
Other charter members of the alliance are the layer-2 technology provider Plasm Network, Balancer-like insurance marketplace, Tidal Finance, and non-custodial AMM DEX Polkaswap.
Developers who are building on Polkadot Network or Substrate can now apply for the alliance.
Moreover, Polkadot said it plans to roll out a “thousand validators” program this month, which aims to support individuals who are running a Polkadot node in an effort to raise the number of its validators by 1,000.
The program is similar to the one that was rolled out on Polkadot’s sister network Kusama back in February. Upon the launch, Kusama had around 180 nodes in February, while now it has about 700 active validators and 393 more who are waiting.
The Polkadot network now has only 249 validators, suggesting that most stakers are opting for third-party service providers.
Technical analysis: Correction drags price lower
DOT/USD price is currently trading 0.7% in the red this week after the price action moved sharply lower today. A rotation lower took place after the price action failed at the short-term resistance line at $5.50.
This zone will offer resistance in the coming days while $4.90 offers nearby support in case the price action continues lower. A move below $5.00 is likely to generate high buying interest in DOT. In case of a consolidation, we may see the price action trading between these support and resistance lines in the coming weeks.
Polkadot announced its launching a new decentralized finance alliance and a support program for validators in a bid to expand its ecosystem.