DOT was trading just below the $5.5 level, but another push to the upside could be expected. The quick recovery after the drop to $5 was an encouraging factor for buyers. Polygon has reached a new high in daily transaction count, due to the activity around the Ordinals-inspired token standard on the network.
Polkadot [DOT] has posted huge gains in recent weeks as the altcoin market began to heat up. However, the social metrics for the tab were disappointing. Development activity remained high and gave confidence to investors.
DOT technical analysis showed that despite the volatility seen over the past two days, the bulls were still in control. A critical resistance level remained strong, but sellers were weakening.
In other news, Daily transactions feature leading Ethereum [ETH] sidechain Polygon [MATIC] hit an all-time high of 16.4 million on November 16, according to Polygon Scan data presented.
Retracement Reached Just $5 Before Another Bounce
The daily market structure remained firmly bullish. The RSI was at 67 to reinforce the idea that the bulls were in control. Balanced volume spiked above February highs to underline intense buying pressure in recent weeks.
The Chaikin Money Flow (CMF) also signaled a huge capital inflow into the DOT markets. The $5.3 to $5.56 region was a bearish order block on the one-day chart since late May. DOT managed to close a daily trading session above it on November 12, breaking it as a resistance zone. The subsequent pullback reached $5 but saw a strong rebound very quickly.
Fibonacci retracement levels of $4.73 or less were not tested. This was another sign that buyers were dominant and that market conditions favored shallow pullbacks at this time. To the north, the $6.2 and $7.05 levels would likely be tested next.
Analysis of Hyblock data by a digital outlet revealed that another drop to the $4.9-$5 region would not be surprising. It remains to be seen whether it will come before a move to the $6 region or after.
Liquidation data from the last seven days showed that $5 and $6 remain the areas of imminent interest. A move to $6.2 would be a signal that the next one would be $7. Traders will need to be wary of volatility as a large portion of liquidations could reach just above the $6 mark.
Polygon: Massive Increase in Daily Transactions Explained
According to available data, the daily transaction count on the network grew by 166% between November 15 and 16, rising from 6.17 million to more than 16 million in a 24-hour period. This unprecedented surge was attributed to the influx of users who flocked to the network to mint the new POLS non-fungible token (NFT) collection based on Polygon, an Ordinals-inspired token standard on the network.
Since POLS minting began, a total of 102.79 million MATIC tokens, worth around $88 million, have been spent on gas fees. The increase in user activity on the Polygon network raised average gas rates to new highs. On November 16, the average fee paid to execute transactions on the sidechain rose to a high of 700 GWEI from just 100 GWEI the previous day.
With a decrease in POLS minting in the last 24 hours, the average transaction fee on Polygon was less than 200 GWEI. Meanwhile, Polygon’s daily active address count saw growth. Between November 15 and 16, this figure increased almost 10%, according to Sentiment data.
By Leonardo Perez