Polkadot TVL Hits $400M with $16.3M Daily Volume

Key Insights:

• Polkadot’s Hydration DEX hits $400M TVL with $16.3M in daily volume.
• $DOT tests support at $3.5–$3.6 before potential price reversal.
• Support break below the channel could signal further downside risk for Polkadot’s price action.

The Polkadot (DOT) ecosystem has experienced a notable surge, with its Total Value Locked (TVL) surpassing a significant amount. This analysis reflects the increased activity on the Polkadot network and the considerable expansion in user engagement. This growth comes alongside impressive trading activity.

Polkadot’s On-Chain Activity and Market Sentiment

Polkadot’s growth can be attributed mainly to the increasing on-chain activity, particularly through its decentralized exchange (DEX), Hydration. According to Web3Niels, DEX has reached a TVL of $400 million, and its daily trading volume has also seen a notable rise, currently standing at $16.3 million. 

This growth is further supported by a 370% increase in USDC senders on Polkadot’s AssetHub, signaling a substantial rise in network activity. Despite the broader weakness in the crypto market, $DOT could see a price retest in the $3.5–$3.6 range before experiencing a potential reversal.

As the network continues to show strong fundamentals, analyst Niels points to the possibility of a short-term price retest. While the broader market remains weak, Polkadot’s strong on-chain performance suggests that it could soon end its downtrend and reverse course.

Caution Over Potential Breakdown

However, based on Alpha Crypto Signal, warns of a potential breakdown if $DOT fails to hold its support level. If $DOT breaks below the channel support with volume, it could signal a short opportunity, advising traders to remain patient for now.

Polkadot is currently trading within an ascending channel, with the token testing its lower boundary. As long as this support holds, the bullish outlook remains intact. The analyst suggests that a break below this level could lead to further downside.

As of press time, Polkadot was trading at $3.82 and had experienced a 2.20% decline over the last 24 hours. The 24-hour trading volume stands at $405M, demonstrating a healthy market for the token despite the recent price pullback. Polkadot’s ecosystem shows resilience amid market challenges, with growth in user engagement and liquidity potentially driving future price gains.