On March 24, the price of Polkadot’s DOT token corrected by 23% in a brief six-hour period, resulting in $174 million in liquidations across the futures market. This swift downside move also cut the aggregate open interest by 26%.
Now that DOT’s open interest is climbing to a new record high at $1 billion, investors may be worried that another price crash is on the way.
DOT/USDT on Binance. Source: TradingView
Although the event severely hurt leveraged longs at the time, the token managed to rally 46% in 10 days, reaching an all-time high of $46. The explosive gain caused investors to recoup their confidence quickly, and the futures open interest has now reached a record high of $1 billion.
Recently, KwikSwap, a decentralized exchange, expressed interest in using Polkadot’s layer-two solution to lower costs and increase transaction throughput. These might be a few of the fundamental reasons behind the increase in price and futures markets open interest.
The price drop on March 24 was