Drops are common in the cryptocurrency market during a downtrend. Most of the time, it can last a long time. The current crypto winter of 2022 has seen the value of many coins drop. Investors carefully weigh their options and decide if buying on a dip is a smart move in the current market.
Some investors move their assets to what they perceive as safer ground as they brave the storm. A dip in a price chart is a valley. Polkadot has differing expert predictions as to when the coin will finally make the much-anticipated price comeback.
Polkadot has fallen from an all-time high of $54.98 as of November 2021 to a modest $5.58, which is an exponential decline for the coin.
Price Forecast For Polkadot
The current market trend has also been observed in DOT as it has been in a bearish reversal for months in 2022.
DOT price fluctuations are highly dependent on the activity of market forces. With the coin breaking below its previous support level of $10.33, investors are crossing their fingers to see if the bull market will pick up again.
Overall market sentiment is that if Polkadot can break the $7 resistance level, the bulls will rally.
However, the strong downtrend will continue if the price drops below the $5.70 support level.
So far, in 2022, the coin’s price is gradually declining. Even the parachains felt the impact as, for example, Acala USD (aUSD) lost its peg to the dollar.
Judging by bitcoin’s dominance, the decline in bitcoin’s price and dominance is a signal of a possible prolonged bearish market in general.
Should You Buy The Dip?
It’s very tempting to write off the entire project as a colossal failure. However, long-term cryptocurrency investors know that the market can suddenly reverse in an uptrend.
Given macroeconomic factors like inflation, it is easy to see why the cryptocurrency market is currently in a downtrend. Inflation rates in key countries like the United States have risen amid concerns of a global recession.
Also, the conflict between Ukraine and Russia negatively affected the market. With the crash of the USD-pegged stablecoin Terra, it is commonly believed that no project is immune to market forces.
For now, experts believe that buying on the dip will benefit investors in the long run. However, prices may fall further due to the volatility and risks associated with cryptocurrencies.
Therefore, it depends on the investor’s strategy and plans. The general advice is to use only money you can afford to lose when buying dips. Price predictions are just guesswork, and cryptocurrencies have historically often strayed from these assumptions.
