Polkadot (DOT) Price Prediction For 2022: Connecting the Blockchain Dots of Crypto - FX Leaders FX Leaders

Polkadot (DOT) Price Prediction For 2022: Connecting the Blockchain Dots of Crypto

Last updated on Mon, January 10, 2022 by
Jose Maria Miguel Marquez • 5 min read

Polkadot (DOT) is a cryptocurrency that is trying to solve the interoperability problem of different blockchain networks. Currently, there are several different blockchains namely – Ethereum, Cardano, Binance Smart Chain, Polygon Network, Stellar Network, etc., all of which are in essence isolated from each other. Through Polkadot’s innovative technology, its aim is to be able to connect all these different chains and projects together, solving the problem of lack of interoperability. Hence the name “Polkadot.” It imagines the several cryptocurrency blockchains as “isolated dots” which will be connected to each other through Polkadot’s network creating a more interoperable cryptocurrency ecosystem.

Polkadot – Forecast Summary

DOT Forecast: H1 2022
Price: $60-70
Price drivers: BTC creating new all-time highs, Parachain launches
DOT Forecast: H2 2022
Price: $80 – $100
Price drivers: Retail/Institutional adoption of crypto/NFTs, US tapering, Faster/cheaper blockchain technology
DOT Forecast: 3 Years
Price: $200 – 300
Price drivers: Creation of the Metaverse via the blockchain, Interoperability Solution

 

 

Current DOT/USD Price: $

 

Polkadot (DOT) Past Price Analysis:

January 1, 2021 – Polkadot opened at a price of $9.26, and breached the $10.00 psychological resistance level to follow the strong rally from the overall cryptocurrency markets, and reach an all-time high of $49.78 by May 2021.

Then, the crypto market crash happened, and the price of DOT dropped to a low of $10.37, losing almost 80% of its value, from the all-time high. It is worth emphasizing the $10.00 level, which previously acted as a major resistance that drove the price to all-time highs, and is now acting as a strong support level for DOT. It never touched this level during the breakdown mid-year 2021, which signifies strong buying demand in this area. 

DOT has since exhibited a resilient V-shaped recovery, which has almost erased and recovered the entire market crash to date, as it is trading currently at $41.35, which is just a few points below the all-time high levels. A bullish sentiment has indeed returned to the cryptocurrency market, led by Bitcoin (BTC), which is trading near all-time highs again, after also correcting sharply mid-year. DOT has been creating a tight consolidation over the past few weeks, just above $40.00. Finally, it broke out of this consolidation to trade at levels above $50.00 – a new frontier for DOT. 

It reached a new all-time high of $55.09 – this however would be a new top of Polkadot as it has since fallen and broken its midterm uptrend line which was formed from July to November 2021 as most of the major cryptocurrencies sold off as well after a strong 2021 rally. At the time of writing, Polkadot (DOT) is down almost 30% from this new all-time high and is currently sitting at the key 100-day moving average line. 

Recent Changes in the Polkadot Price:

PeriodPriceChange ($)Change (%)
2 Weeks46.74-4.2-9%
1 Month44.93-2.39 -5%
6 Months19.8722.67114%
1 Year19.8737.24703%

POLKADOT Live Chart

DOT/USD

Introduction to Polkadot Coin: 

Polkadot (DOT) is an open-source blockchain technology that helps interoperability across different chains. DOT is Polkadot’s native token. It is used for governance, operations, bonding, and staking. The Polkadot network allows for more flexibility, control, and security for developers and users. 

Their mission is to create an internet where personal identity and data are owned by the individual and not sold to corporations or any central authorities – a totally decentralized web where the users are in control, and not the large institutions of today. The Polkadot network empowers both the innovators and the users to build faster, cheaper, and better solutions for society. 

Polkadot is basically a proof-of-stake (PoS) blockchain with the ability to connect other blockchains to one another using the “hub and spoke” model This is done through the relay chain and the parachains. The relay chain of Polkadot is like a hub or the central unit that acts as a medium to communicate various parachains, the “spoke,” connected to the different blockchains. The parachains, which is a group of blockchain networks, constantly communicates to the relay chain simultaneously to create a seamless and secure network of parachains controlled by the relay chain, or the hub. 

Polkadot is the chief project of Web3 Foundation, a Swiss foundation that funds the research and development of projects, with the mission of creating a more decentralized internet. The founders of Polkadot are Robert Habermeier, Dr. Gavin Wood, and Peter Czaban. It is interesting to note that Dr. Wood is the co-founder of Ethereum. 

Currently, Polkadot is the 8th-largest cryptocurrency in the market, with a market capitalization of $38.21B at the time of writing. 

DOT Price Prediction for Year-end 2022: 

In the case of DOT, predicting the year-end price could, first of all, be heavily influenced by the way the overall cryptocurrency market performs towards the end of the year. Big caps, like Bitcoin and Ethereum, had already rallied to near all-time high levels at the time of writing. Usually, what happens next is that capital flows from big to small market cap coins or Altcoins, such as Polkadot. We can expect that, after a rally in Bitcoin and Ethereum, the Altcoins will follow. 

After looking at the overall market environment, the next logical approach would be to understand the intrinsic factors that could affect Polkadot in the near future. One such possible catalyst would be the continuous operation of the Parachains, which are new and improved, next-generation, layer-1 blockchains. These Parachains were auctioned last November 11, 2021. They also reported that there will be subsequent batches of Parachains that will be opened to the public soon. 

Now that Polkadot is fully launched with the Parachain operations, the next big step would be the future upgrades of the Polkadot network which will enable better and faster interoperability between blockchains. 

DOT Price Prediction for 2024-25: 

We may be looking too far ahead, but the long-term future for Polkadot and cryptocurrencies in general, is definitely bright. Here are the reasons why I believe Polkadot (DOT) could reach the price of $200-300 in three to four years. 

  • Continued retail adoption
  • More Government acceptance 
  • Institutional acceptance of cryptocurrency: ETFs, crypto funds, hedge funds 
  • The explosive popularity of NFTs 
  • The gamification of finance 
  • Interoperability of various NFTs in different cultural platforms (gaming, music, art, etc.)
  • US tapering could drive capital flows from traditional financial markets towards crypto
  • Polkadot’s cheaper, faster, more flexible parachains

DOT Technical Analysis

Polkadot (DOT) Price Prediction For 2022: Connecting the Blockchain Dots of Crypto

DOT’s uptrend line broken, -30% from all-time high of $55

Polkadot (DOT) exhibited a strong V-shaped recovery from the lows of July 2021 to reach new all-time highs. But since then, it has fallen 30% as it broke down below its midterm uptrend line. The question now is, where would the bottom be? 

It has sold down all short-term support levels, namely the 20-day moving average and 50-day moving average (gray line). It had a relief rally at the psychological support level of $40 but this was short-lived as it is now trading below this level. The next major support is the 100-day moving average (green line). It is critical that it bounces off this; if not, the most likely move for DOT in the short term is a further correction towards the 200-day moving average (purple line) which is coincidentally a major price support level as it has historically shown buying demand at this area at least six (6) times in the past year. The major support level around the $26-$27 could possibly be a good opportunity as it has consistently been showing buying support. But of course, buy in tranches and manage your risk. The first price may not always be the best price.

On the other hand, a breakdown of this major support level could spell more pain as it could fall to $20s or even at the most extreme fall to 2021’s lows of $10. 

The recommendation now is to immediately take profits if you were able to buy at a low price. Take partial profits off the table. It is easy to re-enter Polkadot (DOT) when the overall cryptocurrency situation gets better.

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About the author

Jose Maria Miguel Marquez // Technical Market Analyst & Financial Writer
Jose Maria Miguel Marquez is a Certified Securities Specialist of the Philippine Stock Exchange and is an equities and cryptocurrency momentum trader with almost a decade of experience. He specializes in technical analysis to trade the Asian, American, and cryptocurrency markets.