In a bearish downtrend, a dip in cryptocurrency markets is not uncommon. It is possible for it to persist for longer periods of time. Many of the coins’ value has dropped during this crypto winter. Investors have been carefully considering their options, and are deciding if it is worth taking a chance on the market.
Investors may move assets to more secure ground in order to weather the storm. An indicator of a drop is a “valley” in a price graph. Expert predictions vary on the date that the coin will make its much-anticipated return to the market.
Polkadot’s November 2021 record of $54.98 is now a distant memory. It is currently at $5.58. That is an incredible drop.
DOT’s unique focus is on parachains which interlink. These parachains, which are custom-made for each project, intertwine with Polkadot’s relay chain.
The relay chain – the Polkadot network, secures and connects these parachains in numbers between 100 -250.
Price Forecast For Polkadot
Polkadot was also affected by the market’s current trend. It has been in bearish mode for several months and is expected to reverse in 2022.
The activity of the market forces will determine how DOT prices move. Investors keep their fingers crossed for a rally as the coin falls below its previous support levels at $10.33.
According to the general sentiment of the market, if Polkadot breaks the $7 resistance level then bulls will rally.
If the price falls below $5.70, however, it will be a continuation of the bearish trend.
The price of the coin is on the decline since 2022. The effects were felt by parachains as well. Acala USD, for example (aUSD), lost its peg with the dollar.
Judging from Bitcoin’s dominance, the dip in bitcoins price and dominance is a signal of a possibly prolonged bearish market generally.
Do You Want to Buy the Dip?
The temptation to write off the whole thing as a huge failure is tempting. But crypto investors who have been around for a while know the risks involved in attempting to reverse the trend.
It is simple to understand why cryptocurrency is in a downward trend right now, given macroeconomic factors such as inflation. Concerns about a worldwide recession have led to an increase in inflation rates of major nations like the United States.
Market conditions have been adversely affected by Russia-Ukraine conflict. It is now widely believed that any project can be influenced by market forces, as Terra the US-dollar-pegged stablecoin crashed.
Experts believe the dip is a good investment for long-term investors. The volatility and potential risk of cryptocurrency could cause the price to drop further.
So, it depends on the investor’s strategy and plans. However, the rule of thumb is that you should only use money that you are able to afford to lose to purchase the dip. Prices forecasts can be interpreted as speculations. However, historically, cryptocurrency prices have deviated significantly from historical norms.
Featured image by Pixabay, chart from TradingView.com