DOT’s Future at a Crossroads: Will $3.66 Hold or Lead to a $3.00 Drop?

• DOT is testing the $3.66 level, showing a 1.4% increase in the past 24 hours but a 3.59% decrease over the last week.
• A break below the current support level could drive DOT to $3.00, invalidating the bullish channel pattern.
• RSI at 43.51 and MACD show bearish momentum, while open interest signals a slight bullish sentiment in the market.

Polkadot (DOT) is currently trading at $3.66, reflecting an increase of 1.4% within 24 hours. The daily trading volume has reduced by 15.22% to $188.4 million. DOT has decreased by 3.59% in the last seven days. The price has reached an important support level on the lower edge of its rising channel. 

Source: CoinMarketCap

DOT Tests Critical Support in Ascending Channel

Crypto analyst Alpha Crypto Signal highlighted that DOT is trading on the lower side of an ascending channel, a trendline that has been holding up since May. This setup has provided several bounce points in the past weeks. This level of defense would see an increased defense that can apportion the price back above the midline at $4.00 and finally the upper boundary at $5.00. 

The analyst, however, cautioned that a breach below this support would invalidate the channel. This would drive DOT all the way to the $3.00 mark. The future action will be determined by the capability of bulls to sustain the line.

Source: X

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Volume Declines, Open Interest Remains Strong

According to CoinGlass data, there was a sharp decline in trading volume of 28.57% to $272.11 million. However, open interest remained at 1.68% to $425.22 million, indicating that traders are keeping positions in view of market sightings. The current OI-weighted funding rate is 0.0082%, which suggests that futures traders have a slight bullish bias.

Source: CoinGlass

RSI and MACD Signal Bearish Pressure on DOT

The Relative Strength Index (RSI) of DOT is weaker than the 50 level, currently at 43.51. The moving average based on the RSI is 44.96, which provides a slight divergence, but not so much that it will change the trend. DOT is not yet oversold but is under pressure. Closing above 50 would be a signal of strong buyer demand once again and of improved sentiment.

The bearish sentiment is confirmed by MACD data. The MACD line rests at -0.083 and the signal line at -0.036. The two lines are all below the zero mark, showing that there is short-term downward pressure. The histogram is still negative in terms of bars. There is no bullish crossover, implying that there is no confirmation of a reversal.

Source: TradingView

DOT remains at a technical turning point. The break of the bullish trend might enable bulls to take control. If the bullish trend fails, it will likely increase bearish momentum. The next sessions are to be critical to validate direction, as traders will be keen on support, volume, and momentum.

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