The Hyperbridge exploit caused Polkadot [DOT] to lose a significant portion of its market cap, but it has since fully recovered.
The altcoin’s price crashed after a hacker minted 1 billion DOT tokens on Ethereum [ETH] but only sold them for $237K due to lack of liquidity. The team clarified that the actual loss had ballooned to $2.5 million as the team made efforts to recover the funds.
However, the assurance that Polkadot’s core network security remained intact fueled a 17% price recovery.
What drove DOT’s price recovery?
A statement released by the team after the exploit assured users of security, as the core network had not been affected. It’s the bridged DOT tokens on Ethereum.
As a result, the community sentiment returned to 82% bullish from 954.1K voters, as per CoinMarketCap. Consequently, the price of the altcoin rallied from $1.146 to $1.354.
The relief brought about a rebound in network activity. As per Artemis data, the number of transactions increased by 1,400, from 10.5K to 11.9K, in just a day.
Additionally, daily active users (DAU) increased by 1.67x even though the figures remained relatively low. DAU rose from 3,000 to 5,000, indicating users were gradually returning to the network.
The Total Value Locked (TVL) also experienced a surge of about 11.29% in a day, while the stablecoin market cap grew to $77.83 million after the massive drop.
Moreover, the altcoin commanded a significant amount of daily trading volume of about $403 million. However, the revenue of the network remained low as it attempted to get back on its feet.
Can Polkadot break past key resistance levels?
On the charts, Polkadot price action had invalidated the breakdown below the sideways consolidation. Initially, before the exploit, DOT had been bouncing between $1.20 and $1.35 levels since late March.
While the altcoin fully recovered and even surged to the range’s high, it failed to surpass the $1.35 zone. It briefly broke above the resistance due to a cool-off in buying activity after the price failed to stay above the sideways channel.
Surpassing this resistance level would put DOT on course to $1.50, while failure may take the altcoin back to $1.20 or lower.
The Cumulative Volume Delta (CVD) confirmed this as it declined from a daily peak of 1.60 million DOT tokens to 60K when writing.
Notably, the security compromise on bridged DOT on the ETH network made the altcoin lose its correlation to Ethereum. In fact, their correlation coefficient (CC) fell from a peak value of 0.86 to negative 0.55.
Final Summary
- Polkadot fully recovers after the Hyperbridge exploit, with network activity rebounding.
- DOT is facing resistance at $1.35, which suggests the price may fall back to $1.20 or head to $1.50 if the level is breached.
