Polkadot price has come under intense pressure as concerns about its ecosystem remain ahead of the JAM upgrade. The DOT token plunged to $6.50 on Monday morning, down by over 45% from its highest point this year.
JAM upgrade ahead
Polkadot is a blockchain network that was formed by Gavin Wood, one of Ethereum’s co-founders. Its goal was to create a network where people would build independent blockchains known as parachains, which can be validated by validators using the Relay Chain.
Over the years, Polkadot has attracted numerous parachains that have successfully gone through the auction process. Some of the most notable ones are the likes of Acala, Astar, Bittensor, Centrifuge, and Clover Finance.
However, most of these networks have struggled to gain market share against the likes of Ethereum, Solana, and BNB Chain. For example, there is no big Decentralized Exchange (DEX) on Polkadot. There are also no big meme coins in the ecosystem.
The next important event in the Polkadot ecosystem will be the Joint Accumulation Machine (JAM) upgrade that is set to bring major changes in the Relay Chain. According to the Gray Paper, JAM will provide a global singleton permissionless object environment paired with the secure sideband computation parallelized over a scalable node network.
JAM will introduce numerous features. For example, it will open up the relay chain, making it possible for anyone to develop on the network. Today, Polkadot developers need to first move through Kusama, its canary network, and then go through an auction process to move to its network. The auction system will be replaced by Agile Coretime, a more economical model.
Still, while this will be the biggest upgrade since the network was launched, it is unclear whether it will reinvigorate the network. For one, the JAM upgrade is expected to be ready in the next 20 to 60 months.
The biggest challenge for Polkadot, in my view, is that it is facing significant competition from networks that are easy to deploy on like Solana and BNB.
Polkadot price forecast
The daily chart shows that the DOT price has been in a strong bearish trend in the past few weeks. It has crashed from the year-to-date high of almost $12 to the current $6.50. The token has moved below the lower side of Andrew’s pitchfork tool.
Most importantly, Polkadot has formed a death cross pattern when the 50-day and 200-day moving averages cross each other. Also, it has formed a bearish flag chart pattern, pointing to more downside in the coming days. This view will become valid when the token crashes below the ascending trendline that connects its lowest levels since April 13th.
