Polkadot's DOT token has seen its price decline 5.63% over the past 24 hours, dropping from $4.77 down to $4.50 as of August 18, 2023. This continues a downward trend for DOT, which has now fallen 10.01% across the past week. Looking further back shows even greater erosion, with DOT sinking 14.20% over the past month and 37.83% in the last 6 months.

However, Polkadot remains a top 10 cryptocurrency by market capitalization at $5.45 billion. Its 24-hour trading volume reached $165.46 million, showing significant interest still exists despite the deteriorating price action.

From a technical standpoint, DOT appears oversold with its Relative Strength Index around 25. Previous drops to similarly oversold levels proved to be profitable buying opportunities as DOT subsequently rebounded. This suggests the current weakness may be setting the stage for the next leg higher.

Broader risk asset weakness and concerns over a global economic slowdown have weighed on crypto prices recently. However, as a leading smart contract platform, Polkadot stands to benefit from ongoing blockchain adoption trends despite choppy market conditions.

Now is a Favorable Time to Buy the Dip in Polkadot

Savvy crypto investors know that entering during periods of negative sentiment and seller exhaustion often proves the best time to accumulate for the long-term.

Polkadot's fundamentals remain highly bullish. As an interoperable multi-chain network, Polkadot aims to power the decentralized web of the future. Its robust technical architecture and strong developer community position it well to capture growing demand for blockchain-based applications.

Polkadot facilitates cross-chain composability, allowing different blockchain networks to exchange information and transactions. This interoperability solves a major pain point inhibiting mainstream decentralized app adoption.

Now trading 67% below its all-time high, DOT provides an intriguing risk/reward opportunity at current levels. Further near-term declines are possible, but Polkadot appears significantly undervalued given its tremendous long-term growth potential.

My Prediction: Polkadot Will Reach $20 by 2025

Based on Polkadot's promising technology, expanding ecosystem, and favorable macro tailwinds, I anticipate its DOT token reaching $20 by 2025. This represents nearly 450% upside from current levels.

Polkadot's core value lies in its ability to enable an interoperable internet of blockchains. This multi-chain future will require the type of flexibility and communication Polkadot specializes in.

As blockchain adoption accelerates, Polkadot is poised to capture a meaningful share of activity due to its open, easily-connectible framework. The surging Web3, DeFi, and NFT movements should provide further tailwinds.

From a trading perspective, DOT remains in a clear long-term uptrend despite the recent correction. Its technical and on-chain metrics suggest the path of least resistance is higher over a multi-year investment horizon.

I believe patient, long-term oriented DOT investors will be rewarded tremendously for weathering what may prove to be temporary macro and market headwinds.

Should I Buy Polkadot Now?

For those looking to gain exposure to a leading smart contract platform, now appears to be an opportune time to invest in Polkadot.

DOT can be purchased while it trades 67% below its all-time high, increasing the likelihood of substantial upside from current levels. The recent dip improves the risk/reward proposition.

However, crypto investing remains risky. Polkadot's price may continue declining in the short-term, especially if global macroeconomic conditions continue worsening. Appropriate portfolio sizing and risk management are vital.

But for strategic investors, buying Polkadot during bearish sentiment and capitulation often proves the profitable move over the long run. Those with multi-year investment horizons stand to generate considerable returns if Polkadot's ascension up the crypto ranks persists.

How Much Polkadot Should I Buy?

Determining how much Polkadot to buy depends primarily on your risk tolerance and investment time horizon. As a volatile crypto asset, DOT should represent only a small allocation within a diversified portfolio.

Most experts suggest investing no more than 5% of your total portfolio into a single crypto asset. This limits exposure, while still allowing ample upside potential. Younger investors may tolerate slightly higher allocations, while near-retirees should cap DOT exposure to 1-2% or less.

Dollar cost averaging - accumulating DOT in small increments over an extended time period - can help smooth out volatility versus making a single lump-sum investment.

Avoid investing any funds you may need access to in the short-term. Polkadot is a long-term play, and investors should prepare to hold DOT for 5+ years given crypto's boom-bust cycles.

Deciding on a DOT allocation that properly balances risk versus reward given your specific circumstances and objectives enables benefiting from Polkadot's upside potential while safeguarding your broader financial position.