Polkadot (DOT) has advanced more than 20% since March 10, 2023, rising from $5.15 to a high of $6.71. Last week, the U.S. Central Bank raised its benchmark interest rate by 0.25% but hinted that it is nearing its maximum level for 2023.
It appears encouraging that the central bank is less inclined to increase the cost of money, but investors should keep in mind that global economies are exhibiting signs of stress.
The current price of Polkadot (DOT) stands at $6.05, which is still more than 80% off from its 2022 highs that were registered in January. But where is the price of Polkadot (DOT) going next, and what can we expect from April 2023?
Today, Stanko from the Crypto Lists website will discuss DOT price estimates from a technical and fundamental analysis perspective. Please note that there are also many other factors to consider when entering a position, such as your time horizon, willingness to risk, and how much margin you have if trading with leverage.
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- 1 Beatport is teaming up with Polkadot
- 2 Investors should continue to take a defensive approach
- 3 Technical analysis for Polkadot (DOT)
- 4 Important support & resistance levels for Polkadot (DOT)
- 5 What speaks for the rise in the Polkadot (DOT) price?
- 6 What indicates the downfall of Polkadot (DOT)?
- 7 What do analysts and experts say?
Beatport is teaming up with Polkadot
Polkadot is an open-source project that enables cross-blockchain transfers of any type of data or asset, not just tokens. Polkadot allows users to launch their own blockchains on top of the main Polkadot blockchain, and because of this, it is often called a “blockchain of blockchains.”
The mission of this project is to enable a completely decentralized web where the identity and data of users are their own, and it is important to note that Polkadot can easily upgrade itself to changes without hard forks as better technologies become available.
Polkadot is continuously working on new features and new projects. According to the latest news, Beatport, the global leader in electronic music for D.J.s, is teaming up with Polkadot to launch a digital collectible marketplace bringing electronic music culture to Web3. This will allow artists, producers, and record labels to create and sell unique digital assets while generating greater fan engagement.
“The electronic music community has always been at the forefront of cultural shifts, and their early embrace of Web3 and all the promise it offers is no different. Polkadot’s open and interoperable ecosystem enables us to seamlessly tap into Web3 and celebrate electronic music by connecting fans with their favorite artists in unique and powerful new ways.”
– Ed Hill, SVP of Beatport’s Media Group
Investors should continue to take a defensive approach
The cryptocurrency market remains supported after the Federal Reserve hinted it was close to pausing interest rate hikes amid turbulence in the banking sector. The Fed’s softer tone relieved markets, and according to Macroeconomist Henrik Zeberg, as long as the U.S. economy is not in a recession, the prices of Polkadot (DOT) and other cryptocurrencies will continue to be supported.
Despite this, investors should continue to take a defensive investment approach as the effect of the 2022 crypto price crash, U.S. inflation growth, and interest rate hikes haven’t diminished from the market yet.
The cryptocurrency market is still heavily correlated to equities and vulnerable to macro market shifts, while JPMorgan has reaffirmed its negative outlook on the cryptocurrency market in a recent report after problems around Silvergate Bank.
JPMorgan warned that replacing the instantaneous network for processing dollar deposits and withdrawals will be a difficult task. According to JPMorgan, many firms in the crypto industry could experience liquidity problems, and as they look to pay back creditors, they may liquidate their crypto assets, which could trigger a sell-off in the crypto market.
Bridgewater Associates founder and billionaire Ray Dalio believes that financial markets will be in a poor state for the next five years, and according to Dalio, the same rule will most likely apply to the cryptocurrency market.
Renewed concerns over the global banking system took hold on Friday after market participants turned their attention to Deutsche Bank, and it is also important to mention that further pressure across the crypto market was also spurred after Binance temporarily halted all spot trading due to a bug.
Technical analysis for Polkadot (DOT)
Polkadot (DOT) has advanced more than 20% since March 10, 2023, rising from $5.15 to a high of $6.71. Despite the current correction, bulls still control the price movement, and as long the price of DOT is above $5.5, we can’t talk about a trend reversal.
Important support & resistance levels for Polkadot (DOT)
On this chart (the period from July 2022), I marked important support and resistance levels that can help traders to understand where the price could move. According to technical analysis, bulls control the price movement of DOT for now, and if the price advances above $7, the next target could be resistance that stands at $8.
The important support level is $5.5, and if the price breaks this level, it would be a “SELL” signal, and we have the open way to $5. If the price drops below $5, which represents very strong support, the next target could be located around $4.5 or even below.
What speaks for the rise in the Polkadot (DOT) price?
Bulls continue to control the price movement of DOT despite the expectations of “some market turbulence,” and according to the technical picture, DOT still has room for the upside.
Traders should also consider that the price of Polkadot (DOT) is correlated with Bitcoin, and if the price of Bitcoin jumps above $30000, we can see this cryptocurrency at a higher price level than the current price.
What indicates the downfall of Polkadot (DOT)?
The beginning of the 2023 year has been successful for Polkadot (DOT), but investors should continue to take a defensive investment approach as the macroeconomic landscape remains uncertain.
Economists have warned that a global recession could be on the horizon, and the price of DOT could drop again to levels seen in December 2022. The current support level for DOT stands at $5.5, and if the price falls below this level, the next target could be strong support at $5.
What do analysts and experts say?
The cryptocurrency market remains supported after the Federal Reserve hinted it was close to pausing interest rate hikes, while some analysts said that the current crypto rally suggests that the banking system is terrible and the economy needs an alternative.
Despite this, investors should continue to take a defensive investment approach as the macroeconomic landscape remains uncertain. Fundamentals of Polkadot (DOT) are strongly tied to the overall cryptocurrency market, and according to JPMorgan, many firms in the crypto industry could experience liquidity problems after problems around Silvergate Bank.
As they look to pay back creditors, they may liquidate their crypto assets, which could trigger a sell-off in the crypto market.
At the same time, many analysts said that the U.S. economy faces a recession risk that could dent crypto market sentiment again, and the main question still remains how much time Fed will need to hold policy at restrictive levels. The federal funds rate is now in a range of 4.75% to 5%; there’s a general expectation of a contraction in the economy, and it will impact corporate earnings and financial markets.
Disclaimer: Crypto is extremely volatile and not suitable for everyone to invest in. Never speculate with money that you cannot afford to lose. The information on this site is presented for educational purposes only and should not be construed as investment or financial advice.