The Polkadot price is bouncing back after it crashed to $32.60 in overnight trading. DOT is trading at $35.95, which is 10% above the lowest level today. Its market capitalization has dropped to more than $34 billion, making it the 9th biggest cryptocurrency in the world.
The background: Polkadot is a leading blockchain project that was started by the co-founder of Ethereum. The network is relatively similar to Ethereum in that it helps developers build decentralized applications. In fact, many developers have used it to build their own apps. The most famous of these apps are Polkadot itself, Chainlink, Kusama, Ontology, and Ox. 6 of these projects have a market cap of more than $1 billion.
What happened: Polkadot price declined sharply as part of the overall cryptocurrency sell-off. In fact, most digital coins like Bitcoin, Etereum, and Ripple declined sharply in the overnight session. This happened as US treasury yields rose as investors wait for statements by several Fed members and the upcoming US inflation numbers.
Polkadot price prediction
The four-hour chart shows that the Dot price formed a double-top pattern at around $135. In technical analysis, this is usually a bearish sign. The price then dropped and moved below the neckline of the head and shoulders pattern that was forming. It has also moved below the 25-day and 50-day moving averages (MA) and the ascending trendline that is shown in black.
Therefore, at this stage, the outlook for DOT price is bearish. The trend will be confirmed if the price manages to move below today’s low of $32.55. However, a move above the ascending trendline at $38 will invalidate this trend.
DOT price chart
Follow Crispus on Twitter.