Polkadot has been in a bear market since last month, with investors and traders exiting the market. According to CoinGeckoThe token has fallen by over 16% in the last 2 weeks. With bears in control of the market, Polkadot’s short-term gains could be compromised.
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Despite showing that Polkadot can still be effective, users are still skeptical about the platform’s viability and DOT’s ability to rally in the coming days. With low investor confidence and a seemingly overhyped asset, Polkadot could face a tough time in the coming days.
July: A Perfect Month for DOT?
In a recent X post from the official Polkadot account, they shared July metrics from the platform showed significant growth overall over the past month. The platform saw an increase of 1,100 unique voters on the governance side, with over 118 referendums on the platform.
Great weekend reading → July 24: Key Network Metrics and Insights
At a glance, Polkadot had:
🔹 ATH for number of OpenGov referrals
🔹 Weekly GitHub commits are increasing
🔹 Constant activity on the forum and new usersSee details + take a special look at the Polkadot app 👀https://t.co/e6eCquRWbk
– Polkadot (@Polkadot) August 16, 2024
Polkadot also hosts a very active developer base, with over 5.5K weekly commits made to its GitHub repository with over 29.9K repositories. However, active developers have been stagnating on the platform. According to recent data, the number of weekly active developers stagnated at 900 in July.
In a post made by Polkadot Chief Ambassador Alice and Bobthey detailed a problem that has been plaguing the ecosystem for some time.
Inflation is caused by OpenGov spending more than it earns, because they just print more DOT to make up the difference.
To solve inflation, reduce unnecessary OpenGov spending. Your DOT tax should be well spent, not poorly spent. https://t.co/20wq07eZPR
-Alice and Bob 🥐 (@alice_und_bob) August 17, 2024
“Inflation is caused by OpenGov spending more than it earns, because they just print more DOT to make up the difference. To solve inflation, reduce unnecessary OpenGov spending. Your fiscal DOT should be spent well, not poorly,” they said in the post.
The sentiment is shared by some community members, who say that OpenGov’s spending is problematic and should face some cuts to help the community. Some have even commented on recent posts on the Polkadot account.
Polkadot has fallen from crucial support at this level
DOT looks set to continue its downward spiral in the long term as bears break the $4.61 support level that bulls have been trying so hard to hold. This represents a major setback for investors and traders, which has compounded the general sentiment of skepticism in the community.
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With the community’s distrust of the platform, investors and traders will see this as a sign of poor governance on Polkadot.
Meanwhile, DOT bulls are likely to attempt to slow the token’s downward momentum in the coming days or weeks. If the overall sentiment towards the Polkadot platform does not improve in the coming weeks, we can expect more pain for DOT as investors and traders find value elsewhere.
Featured image from Pexels, chart from TradingView