Polkadot price has come under intense pressure in the past few months and is trading at the lowest level since July 13 of this year. It has crashed by 88% from its highest level this year, making it one of the worst-performing big-cap coins in the world. DOT is now trading at the lowest level since December 2020.
Is Polkadot a good buy?
Polkadot price has been in a strong bearish trend in the past few months. There are several reasons for this. First, this decline happened in line with the performance of other cryptocurrencies like BTC, DOGE, SHIB, and Cardano. This year alone, cryptocurrency prices have tumbled and the market cap has tumbled to below $1 trillion.
Analysts point to several factors such as the hawkish Federal Reserve and the extremely strong US dollar. The US dollar index surged to the highest level in more than 20 years. Historically, risky assets like cryptocurrencies, gold, and stocks tend to drop in a strong US dollar environment.
Second, DOT price has also crashed in the past few months because of lingering concerns about Polkadot’s ecosystem. A closer look at the top parachains in the ecosystem shows that they are all struggling.
For example, Acala Network’s assets have dropped sharply in the past few months after its stablecoin, aUSD crashed. Its total value locked has plummeted from over $1.5 billion to about $50 million. Similarly, MoonRiver’s assets have dropped to over $65 million from the all-time high of $380 million. Moonbeam’s assets have dropped to $57 million.
Polkadot price prediction
The weekly chart shows that DOT price is in trouble. It formed a double-top pattern at $50.55, which is usually a bearish sign. It also managed to move below the neckline of the double-top pattern at $10.43. At the same time, it has formed a break and retest pattern, which is usually a bearish sign. It has also dropped below all moving averages.
Therefore, there is a likelihood that Polkadot price will continue falling in the coming months. Based on the double-top pattern, the next key support level to watch will be at $2.13. A move above the resistance at $10.43 will invalidate the bearish view.
