- DOT price broek above this week’s resistance to gain 10% on a weekly basis
- Following a break, the price action printed a new 5-week high at $4.93
- A break of this resistance line would allow buyers to target $5.12
Polkadot (DOT) price has broken out of its range this week to trade over 10% in the green on a weekly basis. In the meantime, the platform is collaborating with Ontology (ONT) in an effort to boost the adoption of decentralized identity solutions.
Fundamental analysis: ONT partnership
Polkadot, on which Ontology plans to develop applications, is a sharded blockchain that can perfectly link a number of chains within a single network. According to the official announcement, Ontology and Polkadot will be collaborating to “accelerate the integration of both ecosystems and increase levels of trust and data sovereignty for users across the industry.”
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Polkadot supporter Parity Technologies will be helping Ontology during the integration of its Decentralized Identity (DeID) solution, which is meant to facilitate the process of accessing the DID solution within the Polkadot blockchain.
“The integration of Ontology’s DeID is part of a wider effort for Ontology to build a parachain on Polkadot…the parachain [may] provide a series of credit-based services on decentralized identity and cross-chain communication.
“These credit services will include OScore as well, our newly launched credit scoring system designed to seamlessly accelerate the potential to borrow or lend based on a user’s cryptocurrency transaction and asset management history.”
Moreover, the parachain will also offer cross-chain liquidity to the Polkadot ecosystem, which Ontology will use to speed up the current development of the decentralized finance (DeFi) ecosystem while diminishing the entry barrier for app developers.
Initiatives such as this one aim to “in turn boost the liquidity of digital assets such as ONT, ONG and DOT,” Ontology explained.
“We look forward to working closely with the Ontology team to increase the use of ONT ID 2.0 through Polkadot to realize the benefits of digital identity, privacy for DeFi projects and beyond,” said Eric Wang, the Ecosystem Development Lead at Parity.
The blockchain team also said it plans to place offers on a parachain slot as well as roll out one of Polkadot’s first Initial Parachain Offerings (IPO).
Technical analysis: The breakout confirmed
DOT/USD has been testing the descending trend line near $4.34 in the past week before managing to close above it on Saturday. The buyers then returned lower to retest the broken resistance and allow for new DOT buyers to join and push the price action towards a new 5-week high at $4.93.
As it can be seen on the chart above, the price action stopped at the horizontal resistance near $4.90. A break of this line paves the way for a trip above the $5 mark where sellers would use $5.12 to regroup and cap new gains.
Summary
DOT/USD price broke out above its prior range to trade over 10% higher this week. Elsewhere, Ontology blockchain is working together with Polkadot to expedite the development of decentralized ID solutions.
