Polkadot price bounced back this week and surged to its highest level since March as the crypto market improved, and after the developers made important news on elastic scaling. The DOT token jumped to $4.75, an increase of over 45% from its lowest level this year.
Why Polkadot Price Surged
Polkadot token surged this week as investors rotated back to the crypto market as global risks eased. This rally mirrored that of other cryptocurrencies like Ethereum, Solana, and Pepe, which jumped by double digits.
The surge accelerated after the US reached a trade deal with the UK, which provided a roadmap for other countries to follow. It also happened ahead of the first-ever meeting between the United States and Chinese officials.
A trade deal between the US and China would be a good thing for Polkadot and other cryptocurrencies as it would reduce recession risks and facilitate the Federal Reserve in starting to cut interest rates.
Polkadot price also surged after the developers launched elastic scaling on Kusama, its canary network. This is a major part of the transition to Polkadot 2.0, which aims at boosting throughput by ensuring flexible resource allocation.
It does this by enabling parachains to produce multiple blocks per Relay Chain block. Once fully activated, it will make Polkadot one of the fastest players in the crypto market with about 2 seconds per block.
Further, elastic scaling, when used with Agile Coretime, will enable parachains to lease additional cores on-demand for short periods.
DOT price also rallied after the volume of stablecoins in the network rose slightly. It now has $102.65 million, most of which are USD Coins (USDC). An increase in stablecoin market cap is a sign of higher activity in a blockchain.
Polkadot Price Technical Analysis
We’ve repeatedly argued for a higher Polkadot price, evidenced in these analyses: here, here, and here. The most bullish case is on the weekly chart, where it has struggled to move below the key support level at $3.5 since early 2023. It has made a quadruple bottom pattern, a popular bullish pattern.
Polkadot price has moved to the accumulation phase of the Wyckoff Theory, which is characterized by low volume and consolidation. Therefore, it’s likely that the Polkadot price will have a bullish breakout, with the next point to watch being at $11.50, the highest point in December last year, which is about 135% above the current level. A move below the support at $3.5 will invalidate the bullish outlook.
