Polkadot – Summary of the forecast
|Polkadota forecast: H1 2021
Price: $ 50 to $ 60
Price drivers: Positive crypto mood, ETH performance, USD devaluation, USD 20.00 technical resistance, potential regulation
|Forecast Polkadota: 1 year
Price: $ 100
Price drivers: bullish crypto mood, dollar devaluation, blockchain expansion
|Forecast Polkadota: 3 years
Price: $ 200- $ 300
Price drivers: USD recovery, end of COVID-19, increased regulation of cryptocurrencies, reduced blockchain growth due to government and central bank intervention
The polkadot was the last of the major cryptocurrencies to follow the crypto craze that continues, as that cryptocurrency rose above $ 42 . But after a deep retreat in late February at $ 26, customers seem to be back under control again, pushing above $ 35 again. DOT / USD started to turn only in the last days of December. On Dec. 28, Polkadot traded at around $ 5, but joined the bull trading in the crypto market, and on Feb. 23, it traded at $ 37, after withdrawing just under $ 30. That means he appreciated it a month and a half more than eight times. 20 The SMA is also doing a good job on the daily chart, pushing the price higher, keeping the polkadot in an absolute rise, although the price has not been able to catch up since early February.
The transition from late 2020 to early 2021 was a positive time for the cryptocurrency asset class. Highlighted by the industrial scale Bitcoin (BTC) darkening $ 50,000 per BTC, the entire cryptosphere has experienced bullish participation. One of the coins that gained a wide reputation was the newcomer Polkadot (DOT). Launched in May 2020, the Polkadot protocol aimed to provide connectivity options for custom side chains and public blockchains.
Created by Ethereum co-founder Gavin Wood, Polkadot initially saw limited public interest. As a result, the DOT coin was traded in a relatively steady range between $ 2.50 and $ 5.00 from May to the end of December 2020. However, December 2020 to February 2021 proved exceptional for DOT, as prices abruptly reached a peak a level of just over $ 30.00, far. Although Bitcoin and Ethereum may have attracted a lot of media attention, Polkadot has shaped itself as an outstanding investment.
Recent changes in the price of Polkadot
Like all cryptocurrencies, DOT is subject to a collection of unique market drivers. Among the most interesting are corporate rumors, government regulations, hacking, fraud and litigation. However, where Polkadot is unique in relation to other cryptocurrencies, it is its financial resources. Since its founding in 2017, Polkadot has raised about $ 200 million from investors through crowdfunding and multiple coin offerings. Accordingly, Polkadot ranks among the best funded blockchain startups in history.
Since the launch of DOT in May 2020, there has been controversy over what distinguishes Polkadot and Ethereum. Due to the fact that the two cryptos share the same founder Gavin Wood, these concerns are justified. Both coins are similar in that they manage a primary blockchain that facilitates transactions and allows the addition of smaller, independent blockchains. Also, both ETH and DOT rely on “investment” instead of “mining” to ensure effective network growth. Finally, efforts are being made to facilitate coin transactions between Ethereum and Polkadot. Given the striking similarity of DOT’s technology to ETH, it’s no wonder the two coins occasionally had strong correlations.
Factors Affecting Polkadot (DOT)
The assessment and growth potential of Polkadot will in many ways rely on the expansion of the blockchain itself. The primary goal of DOT is to act as a bridge between public and private networks. Basically, Polkadot aims to merge the public blockchain with the parahains. In the event that the adoption of the main cryptocurrency encourages the prolonged spread of the blockchain, it is possible that Polkadot will be a vital part of the cryptocurrency ecosystem. Conversely, if central banking bodies and governments intervene, DOT estimates may stagnate due to regulatory problems.
Pokadot Live Chart
Polkadot (DOT): 5-year price forecast
Accurately predicting the pricing performance of any asset over a five-year period is a challenge. For a cryptocurrency like Polkadot, even moreso. However, there are four market drivers that are likely to affect the long-term market value of DOT. On the bullish side of the equation, the devaluation of the US dollar (USD) and the expansion of the blockchain boost the outlook for Polkadot. Nevertheless, bearish factors such as central banking policy and government intervention threaten not only DOT but the entire class of crypto assets. Although time will decide how Polkadot will work, we can consider these factors and their potential impact on DOT prices.
How will inflation and the devaluation of the US dollar affect DOT?
One of the biggest factors cryptos face is the well-being of the US dollar. Starting with the response of the U.S. government and the Federal Reserve (Fed) to the coronavirus pandemic (COVID-19), the USD has struggled to maintain its value. To combat the economic consequences of COVID-19, the U.S. government under the Trump administration passed the $ 2 trillion CARES bill. Under CARES, a huge amount of direct incentives have been sent to citizens and disaster relief funds have been allocated to businesses. In addition to the CARES Act, the Fed has launched an open program of unrestricted quantitative easing (QE). Both policies expanded the supply of dollars to an unprecedented level, reducing the dollar index for 2020 by 6.8%.
By entering 2021 and beyond, it is certain that there will be more incentives and Fed QE. One of the first actions of US President Joe Biden was the announcement of plans for the $ 1.9 trillion COVID-19 aid package to be launched in early 2021. In addition, the Fed has committed to keep debt redemption at $ 120 billion a month and keep interest rates at 0.0-0.25% to maximum employment, average inflation of 2% and a return to targeted economic growth. While these policies will drive growth, the long-term consequences of facing the dollar are bearish. In the event that new strains of COVID-19 extend these recovery-oriented policies to several years, dollar devaluation and inflation are likely. For DOT, a weak dollar is likely to be the bullish driver of the market. As the dollar fades, investors will seek to store capital in other assets; goods,
Will Polkadot and Blockchain become the main ones?
Since the launch of Bitcoin in 2009, the financial world has wondered if and when blockchain technology will enter the mainstream. After the cryptozyme of 2018, it seemed as if cryptos would soon be an afterthought. However, with the beginning of COVID-19 and the increased demand for digital currencies, Polkadot’s technology became a sought-after commodity.
The initial factor that attracted legions of serious investors in Polkadot was its growth potential. The primary goal of Polkadot is to enhance interoperability between public and private blockchains. If the technology is widely integrated, it could become a de facto “bridge” between networks, blockchains and cryptocurrencies. Simply put, Polkadot is positioned to grow as the blockchain grows – a potentially lucrative correlation.
Estimates from early 2020 have predicted that the global blockchain market will increase from $ 3 billion in 2020 to $ 39.7 billion by 2025. This figure is impressive and suggests an annual compound growth rate of 67.3%. From a practical point of view, these growth figures represent the main acceptance of various blockchain technologies. If realized, it is not beyond the possibility of DOT estimates to grow along with the aggregate market. However, the returns could be much higher if Polkadot ascends to the position of chief blockchain translator.
Will central banks enter the cryptosphere?
For any currency, crypto or anything else, central banking bodies play an integral role in valuations. Although, like Bitcoin, Ethereum, and Polkadot, electronic forms of money are decentralized, they certainly have the attention of the world’s central bankers. In the midst of the COVID-19 pandemic in 2020, interest in crypto exploded – which banks did not go unnoticed. In a statement from January 2021, the head of the European Central Bank (ECB) Christine Lagarde : “[Bitcoin] is a highly speculative asset that has run some ridiculous businesses and some interesting and completely reprehensible money laundering activities. There must be regulation. This must be applied and agreed on globally. ”Without referring to concrete evidence of such cases, Largarde has shown motivation for the ECB to regulate Bitcoin and probably the entire asset class.
At the beginning of the adoption, the US Federal Reserve appears to be developing its own central currency (CBDC). Statements by Federal Reserve President Jerome Powell in early 2020 highlighted the potential launch of : “We [FOMC] are doing a thing that is more important to fix than being the first. Correction means that we look not only at the potential benefits of CBDC, but also at the potential risks, and we also recognize important trade-offs that need to be carefully considered. “ Ever since Powell said that, the Fed has built an experimental CBDC that is supposedly based on blockchain technology. At this point, it seems to be only a matter of time before the CBDC becomes part of mainstream finance.
So, what are the potential impacts of central bank intervention on crypto markets on Polkadot? First, the adoption of comprehensive global regulation as proposed by Lagarde would increase reporting and limit transactions. Both of these problems would slow the growth of the blockchain, bringing the scope of Polkadot’s business. Second, the launch of the CBDC could seriously affect the demand for cryptocurrencies as modes of transmission and wealth stocks. Once again, this is a negative market driver for DOT; if the world’s central banks take over a significant portion of the blockchain, traditional expansion will be limited. This factor would reduce the market share of leaders like Polkadot. If the blockchain becomes narrowed or controlled, the DOT will be in an extremely vulnerable position.
Is a U.S. government ordinance inevitable?
The U.S. general election in 2020 brought a period of unprecedented political uncertainty to the global market. Stocks, currencies and commodities experienced increased volatility as investors pondered the implications of US regime change. Following a final decision made in early January 2021, power in the U.S. Congress and Presidency shifted from Republican to Democratic control. However, despite a severely contested election cycle, cryptocurrencies have had continuous competition. The DOT was no exception, ranging from $ 4.23 on November 2, 2020 to $ 17.99 as the new POTUS and Congress were sworn in on January 20, 2021.
Perhaps the biggest driver of crypto volatility is government regulation. And, when projecting possible Polkadot values over the next five years, it is important to consider Joe Biden’s management’s stance on cryptocurrency regulation. Biden’s conversation points from the campaign trail didn’t give crypto investors much thought. However, Biden has chosen former head of the Merchandise Commission (CFTC) head the Office of the Currency Supervisor (OCC). Barr had previously been a member of Ripple’s advisory board; if confirmed as head of the OCC, Barr will be the first crypto-insider to send a message. The implications could be large for regulation, as Barr may have new innovative ideas on how to regulate and control the blockchain.
Within the Biden cabinet there are several members with records regarding the crypto. As Fed President from 2014 to 2018, new Treasury Minister Janet Yellen has repeatedly accepted access to cryptocurrencies. Nonetheless, Yellen said she would “directly say she’s not a fan,” especially of Bitcoin. Furthermore, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit against Ripple (XRP) claiming that executives had been selling XRPs for seven years without first registering them as securities. This lawsuit will set a precedent for companies that sold coins but did not implement the initial coin offering (ICO). Precipitation from the SEC against Rippleit can prove extensive to further determine whether XRP and crypto in general are securities or currencies. If the SEC is successful, the DOT and the entire asset class are likely to undergo more intensive oversight in the coming years.
Ultimately, government interference is a negative driver of cryptocurrency price markets. Given the regulation acceptable to the Biden administration and the potential intervention of the SEC, many coins could be thrown out of the market. It is important for Polkadot that 2021 is a robust year of blockchain adoption and operational growth. The regulatory environment for cryptocurrencies will develop significantly over the next five years – this could very well lead to a reduction in asset class, which will make many coins obsolete.
Polkadot Technical Analysis (DOT)
The fourth quarter (Q4) of 2020 was a key period for cryptocurrencies. Sentiment was constantly positive, raising like Bitcoin and Ethereum to the highest level. Polkadot later participated in the success, as Polkadot’s chart shows, recovering from an open $ 4.35 on October 1, 2020 to December 31, 2020, closing at $ 9.27. Announcing more than 200% of Q4 gains, DOT ended 2020 with just $ 0.25 of its highest levels.
Initially, January 2021 proved to be a much different story for DOT. In the first two weeks, the price retreated from the highest periods above $ 10.00 to the $ 7.00 area. The January 11 withdrawal recorded a low of $ 7.20 and tested 62% of Fibonacci retracement from its lowest in December ($ 4.72) to its highest in January ($ 10.70). However, bidders quickly bought the dip, increasing DOT to nearly $ 20.00 on January 16th. By the end of the month, prices had consolidated between a high of $ 19.39 and a 38% Fibonacci correction to $ 14.73.
A slow withdrawal indicates that sellers are weak
Price action in December 2020 and January 2021 are indicative of a trending market. The classic bullish trend is evident on the daily chart – steep breakthroughs followed by a failed retreat. In addition, DOT closed January 2021 well above its 100-day moving average ($ 7.67) and life expectancy ($ 11.04, the lowest in August 2020 to the highest in January 2021).
Since writing this article, the technical prospects for Polkadot are insane because customers seem to be committed to buying every significant drop. The key resistance numbers at the top for 2021 will be $ 20.00, $ 25.00 and $ 30.00; these are the basic levels for consolidating or creating medium-term peaks. Important support levels will be daily and weekly Fibonacci corrections of 38% and 62%. If the January high of $ 19.38 holds for a long time, 38%, 50% and 62% of DOT’s lifecycle returns to $ 13.01, $ 11.04 and $ 9.08 will be key areas of support. Until the price announces a big correction and trades below $ 10.00 over a longer period, bullish bias will be guaranteed for 2021