2022-5-14 19:22 |
The Polkadot (DOT/USD) price has bounced back towards the weekend as investors rush to buy the dip in digital coins and technology stocks. The DOT token is trading at $11.13, which is above this week’s low of $6.96. Its market cap has bounced back to about $13 billion, making it the 10th biggest coin in the world.
Why is Polkadot rising?Polkadot, like other cryptocurrencies, has had a strong bearish trend in the past few months as demand for digital tokens declined. The coin’s sell-off accelerated this week after LUNA, one of the biggest coins in the world imploded. It fell from an all-time of $120 to the current $0.003.
Historically, cryptocurrencies tend to move in sync with each other. In most cases, altcoins like Polkadot and Cardano tend to rise when Bitcoin rises and vice versa. This happens even when there is a positive development within their blockchains.
The most recent development in the Polkadot ecosystem was the launch of XCM format. The new update introduced the concept of parachain communication. As such, it is possible for apps built in a network like Moonbeam to communicate with those in Acala.
The current rally is mostly because of the positive sentiment in the financial market. After days of declining, the main indices in the US are all in the green, with the Nasdaq 100 rising by more than 400 points. In the past few months, cryptocurrencies have been correlated with technology companies.
Therefore, analysts believe that in all, coins like Polkadot will all recover if the gains in the Nasdaq 100 holds. However, it is still too early to call a bottom in both stocks and crypto considering that risks are still elevated.
Polkadot price predictionThe hourly chart shows that the DOT price has been in a spectacular comeback in the past few hours. Along the way, the coin has managed to move above the important resistance at $9.42. The 25-period and 50-period moving averages have made a bullish crossover pattern while the MACD has kept rising.
Therefore, there is a possibility that the Polkadot price will keep rising especially if the Nasdaq 100 closes in the green. However, buyers should be aware of what is known as a dead cat bounce. This happens immediately after a major sell-off. As such, if this rally is such a bounce, a drop below $10 can’t be ruled out.
The post Polkadot price prediction: Will the DOT recovery hold? appeared first on Invezz.
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