The Polkadot price has risen in the past three straight days. The DOT token rose to a high of $29.63, which was about 14% above the lowest level this week. Its market capitalization has risen to more than $29.4 billion, making it the 9th biggest cryptocurrency in the world.
Polkadot parachain auctions
Polkadot, like all cryptocurrencies, had a difficult month in September. The coin rose to a high of $38.72 and then retreated to $25.70. It is now trading at $29.63. Polkadot’s price performance was relatively better than that of most cryptocurrencies, including Bitcoin and Chainlink.
There are several reasons why Polkadot struggled in September. First, the US dollar rose to the highest level since November last year in September as the Federal Reserve shifted its tone. In general, as inflation rose, the Fed hinted that it will start hiking interest rates in 2022 and deliver 7 hikes by 2024.
A stronger US dollar is usually bearish for other assets that are traded in the currency like Polkadot and Bitcoin. Also, risky assets like cryptocurrencies tend to sell off in a period of higher interest rates. Indeed, the Nasdaq 100, Dow Jones, and S&P 500 had a relatively difficult September.
Second, the Polkadot price declined because of regulatory issues. In September, China announced that all cryptocurrency transactions in the country were illegal. It went further and asked offshore companies to stop offering crypto services to Chinese citizens. Meanwhile, in the United States, regulators started looking at stablecoins like Tether and USDC.
Third, cryptocurrency prices fell because of the risks about Evergrande, the giant Chinese real estate company. The highly indebted company failed to pay its debts and warned that it could go out of business. Its decline dragged other financial assets lower.
In October, the Polkadot will react to the results of the ongoing parachain auctions, US debt issues, and corporate earnings that will start coming out in the coming weeks.
Polkadot price forecast
The daily chart shows that the Polkadot price has been in an overall bullish trend since July when it crashed to $10.22. It is about 195% above the lowest level in July. The coin has also moved slightly above the 25-day and 50-day moving averages. Also, it is a few points below the all-time high of $48.95.
Therefore, the DOT price will likely bounce back in October, with the first level to watch being at $48.95. On the flip side, a drop below the key support at $25 will invalidate the bullish view.
