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  • Polkadot strives to increase its presence in the DeFi space.
  • DOT struggles to clear a resistance barrier at $5.5.

Polkadot (DOT) is the 9th largest digital currency with a current market capitalization of $4.6 billion and an average daily trading volume of $375 million. The coin underwent a 100x redenomination in August 2020 that pushed to the top-10 largest cryptocurrency assets by market value.

The coin is most actively traded against USDT on Binance, OKEx and Huobi Global.

At the time of writing, DOT/USD is changing hands at $5.28, close to the intraday high of $5.45. The coin extended Thursday’s retreat and lost nearly 3% in the past 24 hours. Despite the sell-off, it is still almost 7% higher on a week-to-week basis.

Polkadot moves into the DeFi space

Polkadot project, which aims to create a link between various independent blockchains, has ventured into a DeFi space. The team announced the launch of a DeFi Alliance that will be populated by the key players in the space. According to the press-release, the alliance will be focused on organizing and promoting discussions on crucial DeFi-related topics on Polkadot.

Chainlink, the sixth-largest cryptocurrency project by market capitalization, will become a founding member of the Alliance. Commenting on the news, Dan Kochis, Global Head of Business Development in Chainlink, said:

“As a founding member of the Polkadot DeFi Alliance, 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.” 

Apart from Chainlink, Moonbeam, Plasm Network Tidal Finance, Equilibrium and other blockchain projects will become a part of Polkadot’s Alliance.

In a separate development, the team announced the launch of the 1,000 validators program in December. The program aims to support and incentivize network participants to run Polkadot nodes to raise the total number of nodes in the network to 1,000 from 249 validators at the time of writing.

Polkadot struggles at the channel resistance

From the technical point of view, DOT/USD is moving inside a channel limited by $5.5 and $4.5. This channel’s upper border has been tested several times since the beginning of December, meaning that the bulls may have a hard time pushing through. 

DOT's 1-hour chart

DOT’s 1-hour chart

On the downside, the local support comes with psychological $5, reinforced by 1-hour EMA200. Once it is out of the way, the sell-off will likely gain traction with the next focus on the channel support of $4.5. This barrier should provide a strong backstop for the price and create a new bullish wave within the range.

On the 12-hour chart, the $4.5 barrier coincides with EMA100, adding credence to the support area. A sustainable move below this area will worsen the technical picture and push the price inside the previous range with the lower boundary at $3.7.

DOT's 12-hour chart

DOT’s 12-hour chart

On the other hand, if $5.5 gives way, the upside momentum may gain traction with the next focus on the recent recovery high of $6.1, followed by a stronger resistance at $6.5