Polkadot (DOT) Price Prediction For 2021: Bullish Flag Pattern Spotted!
- Ethereum (ETH) — Forecast Summary
- Ethereum 2.0 and Other Upgrades
- Ethereum Price Prediction for the Next 5 Years
- Ethereum Turning Into a Safe Haven During Coronavirus
- Surging DeFi Transactions Are Great for Ethereum
- Ethereum 2.0 and Other Upgrades
- Bitcoin Cash (BCH) Price Prediction For 2021
- Technical Analysis
- The price has left the 20 SMA behind since October
Last week, Polkadot (DOT) broke out of a short-term price consolidation to breach new all-time highs and hit our price forecast of $50.00 for the year 2021.
However, the past week has been relatively flat for Polkadot (DOT). Since hitting new all-time highs, it has been trading in a tight range from $48.01-$53.82. This is a positive sign since it only briefly corrected below its previous ATH level, which means there is still buying demand coming into the market as it continues to trade tighter and tighter at highs.
Polkadot (DOT) has outperformed major cryptocurrencies – Bitcoin (BTC) and Ethereum (ETH) for the past two weeks with a gain of 24% in the time period. DOT looks to be a new leader in the cryptocurrency space if it continues its momentum in the coming weeks. A possible key catalyst for the short term would be the rollout of its “parachains” – which, if successful, could drive the price of DOT even further.
Polkadot (DOT) – Forecast Summary
|DOT Forecast: H2 2021
Price: $50 (Achieved)
Price drivers: Bullish year-end crypto rally, BTC reaching all-time highs, Parachain launch
|DOT Forecast: 1 Year
Price: $80 – $100
Price drivers: Retail/Institutional adoption of crypto/NFTs, US tapering, Faster/cheaper blockchain technology
|DOT Forecast: 3 Years<
Price: $200 – 300
Price drivers: Price drivers: Creation of the Metaverse via the blockchain
Polkadot (DOT) Past Price Analysis:
January 1, 2021 – Polkadot opened at a price of $9.26, and breached the $10.00 psychological resistance level to follow the strong rally from the overall cryptocurrency markets, and reach an all-time high of $49.78 by May 2021.
Then, the crypto market crash happened, and the price of DOT dropped to a low of $10.37, losing almost 80% of its value, from the all-time high. It is worth emphasizing the $10.00 level, which previously acted as a major resistance that drove the price to all-time highs, and is now acting as a strong support level for DOT. It never touched this level during the breakdown mid-year 2021, which signifies strong buying demand in this area.
DOT has since exhibited a resilient V-shaped recovery, which has almost erased and recovered the entire market crash to date, as it is trading currently at $41.35, which is just a few points below the all-time high levels. A bullish sentiment has indeed returned to the cryptocurrency market, led by Bitcoin (BTC), which is trading near all-time highs again, after also correcting sharply mid-year. DOT has been creating a tight consolidation over the past few weeks, just above $40.00. Finally, it broke out of this consolidation to trade at levels above $50.00 yesterday – a new frontier for DOT. Moving forward, as momentum continues to grow, we may see Polkadot rise even further, now that more eyes are watching and wanting to get in on the action.
Recent Changes in the Polkadot Price
|Period||Price||Change ($)||Change (%)|
Introduction to Polkadot Coin:
Polkadot (DOT) is an open-source blockchain technology that helps interoperability across different chains. DOT is Polkadot’s native token. It is used for governance, operations, bonding and staking. The Polkadot network allows for more flexibility, control and security for developers and users.
Their mission is to create an internet where personal identity and data are owned by the individual and not sold to corporations or any central authorities – a totally decentralized web where the users are in control, and not the large institutions of today. The Polkadot network empowers both the innovators and the users to build faster, cheaper and better solutions for society.
Polkadot is the chief project of Web3 Foundation, a Swiss foundation that funds the research and development of projects, with the mission of creating a more decentralized internet. The founders of Polkadot are Robert Habermeier, Dr. Gavin Wood and Peter Czaban. It is interesting to note that Dr. Wood is the co-founder of Ethereum.
Currently, Polkadot is the 8th-largest cryptocurrency in the market, with a market capitalization of $51.85B at the time of writing.
DOT Price Prediction for Year-end 2021
Forecasting the price of any financial security is usually a hit or miss business, because nobody can really predict the future. However, in trading and investing, you can definitely place a well-thought-out bet, based on favorable probabilities, as long as you understand and manage the risks, in the event that you are wrong.
In the case of DOT, predicting the year-end price could, first of all, be heavily influenced by the way the overall cryptocurrency market performs towards the end of the year. Big caps, like Bitcoin and Ethereum, had already rallied to near all-time high levels at the time of writing. Usually, what happens next is that capital flows from big to small market cap coins or Altcoins, such as Polkadot. We can expect that, after a rally in Bitcoin and Ethereum, the Altcoins will follow.
After looking at the overall market environment, the next logical approach would be to understand the intrinsic factors that could affect Polkadot in the near future. One such possible catalyst would be the launch of “Parachains”, which are new and improved, next-generation, layer-1 blockchains. These Parachains will be auctioned in batches, beginning on November 11 for the first batch, and December 23 for the second batch. If this program is successful, it could be a strong catalyst for a price rally in DOT at the end of the year.
Update: The year-end price prediction of $50.00 was indeed conservative, as it has already been hit as of today. With about two months to go before the year ends, let’s see how much higher DOT can fly.
DOT Price Prediction for 2024-25:
We may be looking too far ahead, but the long-term future for Polkadot and cryptocurrencies in general, is definitely bright. Here are the reasons why I believe Polkadot (DOT) could reach the price of $200-300 in three to four years.
- Continued retail adoption
- Institutional acceptance of cryptocurrency: ETFs, crypto funds, hedge funds
- The explosive popularity of NFTs
- The gamification of finance
- US tapering could drive capital flows from traditional financial markets towards crypto
- Polkadot’s cheaper, faster, more flexible parachains
DOT Technical Analysis – Buy the Momentum Flag
Here are some key observations of the DOT/USD daily timeframe chart:
- Resilient. Shows a strong V-shaped recovery from the mid-year crash.
- Golden Cross. The 50-day moving average (gray line) crossed over the 200-day moving average (purple), suggesting a change from bearish to bullish sentiment.
- Momentum Indicator Increasing. The Average Directional Index (ADX), which is a momentum indicator, has been showing strength since last week’s breakout. It is already above the key level of 25.00, which means DOT’s move is already gaining momentum as the price moves higher. A breakout from this consolidation would lead its ADX to above 30 levels, at that point we may see more explosive price action from DOT.
- DOT tightly consolidates above all-time high resistance levels as profit-taking weakens.
- MACD crossover indicates increasing bullishness and possibly more momentum coming in the near future.
Recommendation: The past week DOT, has presented a momentum trading opportunity if you were still not able to participate in DOT’s move. Last week was a “pause week” as it was relatively flat, but it is poised this week for a continuation rally.
Trade Idea: Buy the Bull flag pattern
The bull flag is a momentum continuation pattern that most momentum traders love to get into as it presents a good opportunity for them to get in on the action.
Stop loss: $48 (return below the breakout level)
Target Price: $65-$70
VAR: 0.50 – 1.00 (Risk only 0.50% to 1% of your portfolio)
Remember that this is a short-term trade only. You should be quick to get in and out of the trade if it goes south suddenly. Better to buy in tranches as well to get a feel of how the market and DOT’s price action behaves.