Disclaimer: The information presented does not constitute financial, investment, trading or any other advice and is solely the opinion of the author
Dot [DOT]’s ecosystem continues to expand as more parachains developments come on board. In March 2023, more than 20 parachains were added to the Polkadot ecosystem, according to the second edition of Parachain shipping. The new projects include Ajuna Network, Astar Network and Bifrost Finance, among others.
These new parachain developments could put upward pressure on DOT’s token value as they boost demand. Specifically, a project team must win a Polkadot parachain slot auction to connect to the core network. The parachain slot auction is handled in DOT tokens, and the project team could source DOT from individual holders through a crowdfunding process known as “crowd lending” to secure the slots.
To understand the potential impact of these new developments on the value of DOT, we leveraged ChatGPT to gain more nuanced insights and measure the AI model’s perception of the Polkadot ecosystem.
Dot [DOT] ecosystem – ChatGPT analysis
We started with the basics and asked ChatGPT to explain what Polkadot is and how the ecosystem works –
In summary, ChatGPT stated that,
“Overall, the Polkadot ecosystem is designed to foster innovation and collaboration across blockchains, providing developers with a flexible and scalable platform to build a wide variety of decentralized applications”
The “decentralized applications” are also called “parachains”. The Polkadot ecosystem added 21 of these parachains last month, and each project team must win a parachain slot auction to gain access to the core system for a set period of time. It is like paying for a lease for a certain agreed duration.
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To further gauge understanding of the Polkadot’s AI model, we asked it how parachain slot auction works:
The “crowd loan” structure of sourcing DOT tokens includes “staking” to help a project win an auction. This is, simply put, intriguing. Due to the current US regulatory pressure on crypto staking, anything structured in a way that involves “staking” may be subject to regulatory scrutiny. For example, Coinbase recently received a Wells Notice from the SEC. And one of the objects of the possible lawsuit is reportedly the crypto staking service.
So we asked ChatGPT what crowd loans are and their legal status in the US. The explanation was apt, but the AI model failed to confirm whether crowd lending is legal in the US.
Here’s ChatGPT’s analysis of the legality of crowd lending in the US:
At this point, one thing is crystal clear. Parachains developments can boost demand for DOT tokens as project teams need them to win a parachain slot auction. Based on this fact, how will the 21 newly added parachains affect the value of DOT?
This was the response from the AI model:
We had to rate the aforementioned potential upward pressure on DOT’s value due to the added parachains. That’s why we’ve collected historical price data on DOT to make future price predictions.
Some ChatGPT results were inaccurate, with a large variance from price data collected by TradingView.
For example, ChatGPT stated that DOT hit a high of $52 in December 2021. On the contrary, TradingView’s data showed that it hit a high of $39 on December 1, 2021.
The AI model isn’t allowed to make price predictions, so we unfastened it jailbreak techniques to get modest price prediction values for DOT. We had to ask the AI model to break down DOT’s historical price data in 2021 to use for the predictions.
Surprisingly, the results were different from the previous output.
The results indicated a slight variance in TradingView’s data compared to previous output. The jailbreak version is known to give outright false information, but this particular instance was something else.
On the other hand, the classic version resorted to adding a direct link from CoinMarketCap to track historical price data.
However, it is worth noting that the AI model follows several sites to collect cryptocurrency price data. These sites sometimes have different real-time price values of crypto assets and can explain the price discrepancy observed in the first and second outputs.
We then urged ChatGPT to predict the price of DOT by the end of 2023 and 2024 based on the above historical price data. While the classic version put forward its typical disclaimer, the jailbreak version assertively but jokingly predicted that the price of DOT would hit $80 by the end of 2023.
We extended ChatGPT to extrapolate the same data and give a modest average value of DOT by the end of 2024. The AI model set the price of DOT at $120 by the end of 2024.
Not everyone has the patience to wait for long-term prospects. So, what does DOT’s short- and medium-term outlook look like? The daily chart could provide some clues.
Is the $7 value attainable?
According to Polkadot’s price survey, the coin crossed the $6.80 mark before the bears took control and forced DOT back down. Before selling pressure forced the price back to $6.70, the bulls had taken DOT/USD from an intraday low of $6.55 to a high of $6.84.
The digital asset gained 1.37% on the day. However, there is also bearish pressure, somewhat complicating the overall picture. Recently, the bears had driven the price lower, but now the bulls are in control. The $6.80 level is the main resistance level and could be a solid target for the bulls. The $6.50 support level serves as a deterrent to the bearish pressure.
The 24-hour chart shows that DOT was trading bullish for most of the day. Selling pressure, an attempt to get the price lower, competes with buying pressure. But as of now, it looks like the bulls are in charge as they have kept the DOT/USD above $6.60. It is encouraging that both market cap and trading volume have grown.
Bullish technical indicators such as the RSI and MACD point to additional price gains. Since the MACD line is above the signal line and the histogram is increasing, the Moving Average Convergence Divergence (MACD) indicator is displaying an upward trend. The Relative Strength Index (RSI), which is currently above 50 levels at 61.34, is also showing a bullish picture. However, buying pressure must continue for the bulls to push the price higher.
Read Polka Dots [DOT] Price Forecast 2023-24
ChatGPT has a good understanding of the Polkadot [DOT] ecosystem and how the development of parachains could affect the value of DOT in the future. Based on recent developments and overall market sentiment, ChatGPT predicted that DOT’s price prediction could hit $80 and $120 in 2023 and 2024, respectively.
However, the jailbroken version used to predict the numbers above is barely accurate and can be misleading in some cases. As illustrated by the significant variance in historical price data, users should verify ChatGPT’s data rather than blindly relying on its output.
Nevertheless, continued parachain development on the Polkadot ecosystem could increase demand for DOT and increase its long-term value. As such, the 21 parachains recently added could boost DOT’s value if overall market sentiment is positive.
This post I asked ChatGPT’s opinion on Polkadot’s price forecasts, it was quite unusual
was published first on https://ambcrypto.com/chatgpt-polkadot-price-projection-4/