- Summary:
- What is the outlook of the Polkadot price? We explain what to expect now that the ecosystem has shown substantial woes?
Polkadot price has risen in the past two straight days as the recent sell-off takes a breather. After falling to a low of $6.77 on Wednesday, DOT bounced back to $7.61 on Friday. This performance was in line with how other coins traded, with Bitcoin rising back to $20,000 and the total market cap of all cryptocurrencies approaching $1 trillion.
Polkadot ecosystem challenges
Polkadot price performance has been in line with that of other cryptocurrencies. After peaking at $55 in November last year, the coin dropped and reached a low of $6 this year. Recently, the coin has been in a consolidation phase as investors wait for Ethereum Merge.
A closer look at Polkadot’s ecosystem shows that most of its parachains are struggling. For example, in August, a stablecoin in Acala’s ecosystem fell by 99% as it lost its peg. aUSD lost its peg after a hacker minted billions of tokens without providing any collateral. As a result, the total value locked (TVL) in Acala has crashed from over $1 billion to just $43 million, according to DeFi Llama.
Other parachains have not performed well. For example, Moonbeam has seen its TVL crash from over $275 million to $58 million while Moonriver has crashed from $353 million to $77 million. Therefore, there are concerns about the performance of Polkadot as its ecosystem growth stalled.
Polkadot price prediction
Polkadot has been in a strong bearish trend for months. The coin’s sell-off saw it crashed below the important support at $14.25, which was the lowest level in February. It has dropped below the 25-day and 50-day moving averages while the MACD has moved below the neutral point. A closer look shows that the coin is forming a double-bottom pattern, which is usually a bullish sign.
Therefore, there is a likelihood that it will drop and retest the second part of the double-bottom pattern at $6. If this happens, we can’t rule out a situation where it stages another rally in the coming months. A drop below this support will invalidate the bearish view.
