Polkadot (DOT) price suffered a harsh reversal after surging to its highest point since May 2022. It rose to a high of $10.70 and then pulled back to $9. At its peak, the coin had risen by almost 200% from its lowest point in 2023. However, unlike Bitcoin, DOT price remains over 84% below its all-time high.
DOT suffered a harsh reversal
Polkadot’s price action mirrors that of other cryptocurrencies like Bitcoin, Ethereum, and Avalanche. On Tuesday, BTC surged to a record high of $69,300 and then pulled back sharply. It was trading at $63,000 on Wednesday morning.
This price action happened as some Bitcoin investors started to take profits since it had soared from below $16,000 after FTX collapsed in 2022. It also happened as some take-profit orders were triggered.
A take-profit order directs a broker to stop a trade after hitting a certain target. In this case, I assume that many bulls had placed a take-profit at around $69,000. Also, in most cases, cryptocurrencies tend to suffer a major pullback after hitting a key level of resistance.
Polkadot, like other altcoins, has benefited from the recent Bitcoin price rally. In this price action, many investors have ignored the blockchain’s fundamentals, which seem to be a bit weak.
Unlike Ethereum, Solana, and Arbitrum, Polkadot’s ecosystem has not been all that vibrant. It is hard to point out any parachain that is seeing strong market activity. Karura, one of the oldest parachains has just $7.1 million in Total Value Locked (TVL).
Acala, on the other hand, has $32.1 million in assets, with most of them being Acala dollar. Moonbeam has $63.7 million in assets. While these are huge sums of money, they pale in comparison to other newer chains like Sui and Arbitrum.
Read more: How to buy Polkadot.
Polkadot price forecast
Turning to the daily chart, we see that the DOT price has been highly volatile in the past few days. It surged to almost $11 and then quickly dropped to $8.17. It then rebounded to $9.05 at the time of writing.
The coin has remained comfortably above the 50-day and 25-day Arnaud Legoux Moving Averages (ALMA). Most importantly, it has formed a cup and handle pattern, which is usually a bullish sign. The ongoing retreat is part of the handle section.
Therefore, the Polkadot price will likely rebound in the coming days and retest its highest point this year. This rebound will happen as investors buy the dip since the outlook for Bitcoin and other coins is highly positive.
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