Market Overview for Polkadot/Tether (DOTUSDT) as of 2025-10-06

• Polkadot/Tether (DOTUSDT) closed lower at 4.378 after a sharp intraday rebound from 4.121, with total volume exceeding 5.6 million and turnover reaching $24.4M.
• Key support at 4.121 and resistance at 4.283 were tested twice, with a bullish engulfing pattern forming at the 4.121 level on recovery.
• MACD showed bearish divergence, RSI hit oversold at 28 and rebounded, while Bollinger Bands widened as price moved from lower to upper bands.
• Volume spiked during the 4.303–4.391 move, confirming the strength of the rally, but diverged slightly from price during the final 15-minute close.
• Fibonacci retracement levels suggest 4.377 (61.8%) as a likely target, with potential retesting of 4.283 as a key short-term resistance.

Price Action and Volume Behavior

Polkadot/Tether (DOTUSDT) opened at 4.233 on 2025-10-05 at 12:00 ET and closed at 4.378 on 2025-10-06 at the same time, forming a volatile 24-hour session that saw a low of 4.109 and a high of 4.439. Total volume amounted to 5,654,948.89, while total turnover reached $24.4M. The price action displayed a strong bearish thrust followed by a sharp reversal, with multiple candlestick patterns forming around key levels. A notable bullish engulfing pattern emerged from the 4.121 support level during the recovery phase, hinting at potential short-term buying pressure.

Structure & Formations

During the session, two major support levels were identified at 4.121 and 4.283, both of which were tested at least twice. A doji formed around 4.121 during a critical bounce point, indicating indecision. The 4.283 level was retested twice without a break, forming a consolidation pattern. Resistance emerged clearly at 4.391 and 4.283, with the 4.391 level showing strong rejection in the form of a bearish hammer pattern.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages crossed at 4.215 and 4.245 respectively. Price spent most of the session below the 50SMA, confirming a bearish trend before crossing back above it during the late session rally. The 50-period and 100-period moving averages on the daily chart diverged significantly, suggesting short-term buying interest may be gaining traction.

MACD & RSI

MACD turned bearish during the early part of the session, with a negative histogram confirming bearish momentum. However, the histogram reversed to positive as the price rebounded, indicating potential exhaustion in the bearish move. RSI bottomed at 28, signaling oversold conditions, before rallying to 58. This suggests a possible continuation of the upward trend, but caution is advised as RSI has not yet entered overbought territory.

Bollinger Bands

Volatility expanded significantly during the price rebound, with Bollinger Bands widening from a contraction phase around 4.23. The price moved from the lower band at 4.121 toward the upper band at 4.391, suggesting an aggressive reversal. The current position of the price near the middle band indicates that the rally may be losing steam, and a retracement could be in play.

Volume & Turnover

Volume spiked sharply during the move from 4.121 to 4.391, especially during the 15-minute candle that closed at 4.391. This confirmed the strength of the reversal. However, volume declined slightly during the final 15-minute candle, which closed at 4.378, indicating potential exhaustion. The notional turnover also showed a divergence from price, suggesting the market may be preparing for a pullback or consolidation.

Fibonacci Retracements

Fibonacci levels from the 4.121 low to the 4.439 high highlighted key levels of 4.377 (61.8%) and 4.306 (38.2%). Price currently resides near the 61.8% level, suggesting a potential consolidation area before the next move. If the trend continues, the 4.439 level may retest as a resistance, while the 4.306 level could act as a support.

Backtest Hypothesis

Given the observed bullish engulfing pattern at the 4.121 level and the RSI's oversold condition, a potential strategy could be to go long at 4.121 with a stop-loss below 4.109 and a target at 4.377 (61.8% retracement). This setup could be backtested using a 15-minute timeframe, entering on a close above 4.121 and exiting at 4.377 or upon a rejection at that level. A trailing stop could be added once the price exceeds 4.377 to capture additional gains. This strategy would align with the MACD's bearish-to-bullish crossover and the volume confirmation during the rebound.