- Polkadot (DOT) is showing signs of a potential rebound after defending the $3.35 support level, with rising Open Interest and negative funding rates hinting at upcoming volatility.
- A breakout above $4.60 could confirm a bullish reversal, but bearish pressure still lingers.
Polkadot (DOT) has been wrestling with relentless selling pressure, plunging to as low as $3.35. However, this key support zone is proving resilient as buyers step in. A recent rebound from this level coincided with the Relative Strength Index (RSI) touching 31.50—flirting with oversold territory and signaling the potential for a short-term reversal.
As of now, DOT trades at $3.47, down 3.10% in the past 24 hours. Yet, the strong defense of $3.35 could be the foothold bulls need to stage a counter-attack.
Volatility Brews: Liquidations and Funding Rates Tell the Tale
Despite the bounce, DOT’s recent price action reflects heavy bearish dominance. Long liquidations skyrocketed to $754.48K compared to just $32.84K in shorts, largely on Bybit, Binance, and OKX. This suggests retail bulls were overly confident and caught in the downturn.
Meanwhile, Binance funding rates slipped into negative territory at -0.007954%, indicating short sellers now dominate. But here’s the twist—such extreme bearish sentiment often precedes a reversal, especially when paired with increasing Open Interest.
Building Pressure: Can DOT Target $4.60 and Beyond?
Open Interest in Polkadot has climbed by 3.26% to $305.42 million, hinting that traders are building positions in anticipation of a bigger move. When rising Open Interest collides with negative funding, it often signals looming volatility—a potential spark for a short squeeze if prices begin to recover.
For now, all eyes are on the $4.60 resistance level. A daily close above it could confirm a bullish reversal and set the stage for a run toward $5.00 or even $5.38. With a potential W-shaped recovery pattern emerging, DOT may soon test investor patience—and conviction.
Polkadot teeters on the edge of a possible breakout, but caution still rules the market. Bulls must defend $3.35 convincingly and reclaim $4.60 to shift the momentum. Until then, DOT’s fate hangs in a delicate balance between hope and hesitation.
