Polkadot Price Facing Bearish Pressure Amid Crypto Market Slump
The recent bearish sentiment in the crypto market has put pressure on the Polkadot price, which has been consolidating for the past few days. Currently trading at $5.351, the altcoin has dipped more than 25% for the past month but remains 24.23% higher in the year to date. The asset’s total market cap has slipped over the last day to $6.343 billion, ranking it the 13th largest cryptocurrency.
The sell-off in the crypto market has affected Polkadot price and other altcoins, as most of them move in tandem with the heavyweight cryptocurrencies such as Bitcoin and Ethereum. Bitcoin and Ethereum have been in a freefall for the past few days, falling to $26,880 and $1,807, respectively. Most altcoins, including BNB, Cardano, Solana, Shiba Inu, and Avalanche, have plunged, leading investors to expect more downside in the crypto market.
Investors are also looking at the global market mayhem with a US debt ceiling debate and the US banking crisis. The US dollar has continued growing stronger, hovering around a six-month high against the Yen, as optimism around the US debt ceiling talks in Washington raised expectations of higher-for-longer interest rates.
Two Fed policymakers, including Dallas Federal Reserve President Lorie Logan, said on Thursday that the US inflation does not seem to be cooling at the expected rate to allow the Fed to pause its interest rate hike campaign. Traders are pricing in a 20% chance the Fed will hike interest rates in its June meeting. Additionally, the European Central Bank (ECB) also said that it remains committed to achieving its 2% goal, hence will continue raising its interest rates until the guidance is met. An environment of hiked interest rates is mostly bearish for risk assets such as stocks and cryptocurrencies.
Technical Analysis
Polkadot price has been consolidating in recent trading sessions, trading between the tight range of $5.10 and $5.50. The DOT price has remained below the 50-day and 200-day exponential moving averages, as well as the 50-day and 100-day simple moving averages. Its Relative Strength Index (RSI) is below the neutral zone, exhibiting a bearish outlook.
Therefore, with a bearish inclination, analysts expect the Polkadot price to continue consolidating in the immediate term, and a move below the crucial support level at $5.00 will give bears a chance to retest the next support at $4.560. Conversely, a bullish breakout past the 50-day EMA at 5.799 cannot be ruled out.
DOT Price Chart:
Conclusion
The recent bearish sentiment in the crypto market has led to a substantial slump for Polkadot price. Despite consolidating in recent trading sessions, the asset’s total market cap has slipped over the past day due to selling pressure. Investors are looking ahead at the global market mayhem with the US debt ceiling debate and the US banking crisis, and with the US dollar continuing to grow stronger, an environment of hiked interest rates is mostly bearish for risk assets such as cryptocurrencies.
Analysts expect the Polkadot price to continue consolidating in the immediate term, with a bearish inclination and a possible move below the crucial support level at $5.00 giving bears a chance to retest the next support at $4.560. However, a bullish breakout past the 50-day EMA at 5.799 cannot be ruled out. It is essential to keep track of market trends and technical indicators to make informed decisions when investing.
