Market Overview for Polkadot/Tether (DOTUSDT) – 2025-10-03

• Price opened at $4.195 and climbed to a high of $4.337 before closing at $4.231, reflecting moderate bullish momentum in early ET hours.
• RSI moved into overbought territory around 4.33, followed by a pullback and re-entry into oversold near 4.215, suggesting possible short-term exhaustion.
• Bollinger Bands showed a narrow contraction at 4.32–4.33, then expanded downward, aligning with a sharp selloff into 4.212.
• Notional turnover surged during the 00:00–00:15 ET reversal candle, closing at 4.28 after a high of 4.312 and volume spike of 298,881.77.
• A bearish engulfing pattern formed at 4.312–4.280 around 00:15–00:30 ET, signaling a potential short-term reversal and bearish continuation.

Polkadot/Tether (DOTUSDT) opened at $4.195 on 2025-10-02 12:00 ET and closed at $4.231 by 12:00 ET on 2025-10-03, reaching a high of $4.337 and a low of $4.189. The 24-hour volume totaled 10,690,717.11, with a notional turnover of $45,681,339.64. Price action reflected strong intraday volatility, especially during early-to-mid ET hours, before consolidating toward the lower end of its range.

Key support levels emerged around $4.215–$4.212, coinciding with RSI hitting oversold territory and a sharp selloff from $4.31. Resistance levels are forming between $4.270–$4.310, particularly with 4.31 having appeared multiple times as a reversal point. A bearish engulfing pattern at 00:15–00:30 ET, along with a doji at 05:00–05:15 ET, signaled indecision and possible continuation of the downward bias.

Moving averages on the 15-minute chart indicated short-term bearish bias: the 20-period MA was below the 50-period MA for most of the session, especially after 02:00 ET. On the daily chart, the 50-period MA remained above the 100-period MA but below the 200-period MA, suggesting a mixed medium-term trend that could favor bears if price remains below $4.275.

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RSI confirmed overbought conditions during the $4.33–$4.31 pullback and later moved into oversold during the $4.212 low. MACD remained bearish for much of the session, with the MACD line crossing below the signal line and showing a negative divergence around 04:00–05:00 ET. Bollinger Bands showed a narrow contraction at 4.33 and a wide expansion during the selloff, indicating heightened volatility and bearish pressure. A key Fibonacci 61.8% retracement level sat at $4.235–$4.240, aligning with recent consolidation and possible support.

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Backtest Hypothesis

Given the observed bearish engulfing pattern at $4.31 and the oversold RSI signal at $4.212, a mean-reversion strategy could be backtested by entering a short position at 00:30 ET (post-engulfing close at $4.289) with a stop above $4.315 and a target at 4.215. Volume spiked at 298,881.77 on that reversal candle, providing confirmation of the move. A long entry could also be considered on a rebound above $4.235–$4.240 with a target of $4.275–$4.280, using RSI divergence for confirmation. This strategy would rely on volatility clustering and price alignment with key Fibonacci and Bollinger Band levels.

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