The Polkadot (DOT / USD) price has been struggling for the past few days. It trades at $ 21.87, down 15.8% from this week’s high. That decline has increased its total market cap to more than $ 20.87 billion, making it the ninth largest cryptocurrency in the world.
Polkadot and the Fed
Polkadot is a fast growing blockchain project that is relatively similar to Ethereum. The network helps developers build decentralized applications in areas such as decentralized finance (DeFi) and non-fungible tokens (NFT). The platform is relatively popular because of its proof-of-stake technology.
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Developers love it for its speed and the fact that it’s relatively cheaper and safer than Ethereum. Plus, they’re drawn to the fact that it was founded by one of the co-founders of Ethereum.
Like all cryptocurrencies, the polkadot price has been struggling recently due to the restrictive decision of the Federal Reserve. In it, the bank left the rate unchanged, suggesting that it will start tightening in 2023. That statement was relatively different from previous meetings, when the Fed maintained a cautious tone. As a result, the US dollar index has risen to its highest level in weeks.
A restrictive Fed and a stronger US dollar are seen as bad for cryptocurrencies like Bitcoin, Ethereum and Polkadot. They are also seen as bad for growth stocks like Okta and CrowdStrike. This is simply because higher interest rates tend to make investors use relatively safe assets like bonds and dividend stocks.
In the meantime, Polkadot has struggled even after it was added to Coinbase Pro. This admission is usually seen as positive for cryptocurrencies as it creates more demand. However, some of the recent promotions like Dogecoin, Shiba Inu, and Chiliz have underperformed.
Polkadot price prediction
Technical diagram of the Polkadot price
The daily chart shows that the DOT price has been under pressure in the past few weeks. The price of the coin has fallen more than 50% from its all-time high. It has also fallen below the 25- and 50-day exponential moving averages, which is a sign that the bears are in control.
It has also formed a bearish pennant pattern that is shown in black. Hence, there is a chance that the Polkadot price could break out lower in the near future. In this case, the next major level to watch is the support at $ 13.88, which is about 35% below current levels.
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