As stocks and most cryptocurrencies declined, the Polkadot price crashed hard on Thursday and Friday morning. DOT fell to a low of $14.45, which was the lowest level since February 2022. It has retreated by more than 40% from its highest level this year, bringing its total market cap to about $16 billion. Other cryptocurrencies like Bitcoin and Ethereum retreated as well.
Polkadot is one of the biggest cryptocurrencies in the world. It is a blockchain project that enables developers to develop apps known as parachains. Examples of these parachains are Moonbeam and Acala Network. This week, these coins rose after Polkadot implemented a format known as XCM, which enables parachains to communicate with one another.
Polkadot price joined the major sell-off that happened on Thursday as investors worried about the Federal Reserve. When making its decision, the Fed decided to hike interest rates by 0.50%, the highest increase since 2000. It also hinted that it will start implementing a quantitative tightening policy, which means that it will reduce its balance sheet. The decline mirrored that of the Dow Jones and Nasdaq 100 indices, which declined by more than 5%.
Turning to the four-hour chart, we see that DOT declined to a low of $14. A closer look shows that this was the same price that the coin reached on February 24th. It has fallen below the 25-day and 50-day moving averages, while the Relative Strength Index (RSI) has moved below the neutral level of 50. The price is also below the dots of the Parabolic SAR.
Therefore, the coin will likely keep falling as bears target the next key support at $10. This downward trend will happen as long as the price is below the 50-day moving average. It is also in line with the phrases that recommend investors sell in May and go away and then don’t fight the Fed.
This post was last modified on May 06, 2022, 08:15 BST 08:15