Polkadot Price Surged This Week After Elastic Scaling Launch

Polkadot price bounced back this week and surged to its highest level since March as the crypto market improved

Polkadot (DOT) price bounced back this week and surged to its highest level since March as the crypto market recovered, and after the developers made some important news on elastic scaling. The DOT token soared to $4.75, an increase of over 45% from its lowest level this year.

Polkadot price surged as investors returned to the market

The Polkadot token surged as investors rotated back to the crypto market following a period of intense selling pressure. The global macroeconomic risks have since abated, leading to a return of risk appetite.

This rally also unfolded as several other cryptocurrencies, including Ethereum, Solana, and Pepe, experienced double-digit surges. The bullish momentum accelerated after the US reached a trade deal with the UK, providing a roadmap for other countries to follow. It also occurred ahead of the first-ever meeting between the United States and Chinese officials to discuss a potential trade deal.

A trade agreement between the US and China would be a positive development for Polkadot and other cryptocurrencies. It would lower the possibilities of a global recession, which in turn would encourage the Federal Reserve to begin cutting interest rates.

Moreover, Polkadot price surged after the developers launched elastic scaling on Kusama, its canary network. This integration is a major part of the transition to Polkadot 2.0, aiming to boost throughput by enabling flexible resource allocation.

This function allows 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.

Elastic Scaling just hit Kusama. (soon @Polkadot)

Kusama rollups can now auto-scale compute power.

-> More throughput + lower latency to meet any demand or use case

-> Zero compromise on security or decentralization

Millions of users? No prob.

Apps like @playmythical get access… https://t.co/ABR2XN4nsa

— Ben (DeFi Ben) (@Ben__DeFi) August 9, 2023

Further, elastic scaling, when used with Agile Coretime, will enable parachains to lease additional cores on-demand for short periods.

DOT price also increased as 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 usually a sign of higher activity in a blockchain.

As such, the potential for a new all-time high for the DOT token is increasing.

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.