Polkadot price has been on a persistent downtrend in recent months as risk aversion continues to shape the financial markets. In the coming year, the health of the US and global economies will remain major drivers of the altcoin.
2022- The year that tested Polkadot
The onset of 2022 had crypto investors full of optimism after a profitable 2021. In fact, the latter was the year that saw polkadot price hit its all-time high at $55.25. However, the trend has since changed.
Since the beginning of January 2022, the altcoin has had its value drop by about 85%. Indeed, the downtrend is observable in the broader crypto industry. For instance, Bitcoin – the leading crypto by means of market capitalization – has declined by 65% year-to-date. Over the same period, other altcoins such as Ethereum and Dogecoin have had their prices drop by 69% and 57% respectively.
Subsequently, the conversation has shifted from the potential of the digital assets to contagion risks founded on the downfall of a major crypto exchange – FTX. Besides, aggressive interest rate hikes by the Fed and concerns over the health of the global economy contributed to risk aversion and subsequent decline in cryptocurrency prices.
Polkadot price will likely remain under pressure in the initial months of 2023 as heightened recession concerns maintain fear as the key emotion driving the cryptocurrency market. However, the probable loosening of monetary policies by major central banks including the Fed may offer some support to the altcoin. Overall, the health of the US and global economies will continue to shape its path into the coming year.
Polkadot price prediction
With the persistent bearish trend, polkadot price continued to trade below the 25 and 50-day exponential moving averages as seen on its four-hour chart. At the same time, it is close to its neutral level with an RSI of 46.
In the immediate term, the 25-day EMA at 4.56 is a resistance level worth watching. Further rebounding may have polkadot price retest the week’s high at 4.70. On the lower side, 4.20 may continue to offer support to the altcoin in the ensuing sessions.