Market Overview: Polkadot (DOTUSD) – Bearish Momentum and Volatility Expansion on 24-Hour Chart

• Polkadot (DOTUSD) closed below its 24-hour high after forming a bearish candlestick pattern.
• Momentum shifted downward as RSI dipped into oversold territory while volume remained subdued.
• Price tested a key 3.806 support level before rebounding slightly, hinting at short-term buyers.
• Volatility expanded during the night session as Bollinger Bands widened, indicating a potential breakout attempt.
• A large volume spike occurred during the 04:45–05:00 ET session, signaling a potential turning point.

Polkadot (DOTUSD) opened at $3.888 on 2025-09-03 12:00 ET and closed at $3.761 on 2025-09-04 12:00 ET, trading between $3.753 and $3.899 over the 24-hour period. Total volume reached 1,437.07, while total turnover was approximately $5,409.44. The asset experienced a significant pullback, with bearish price action and diverging momentum indicators.

Structure & Formations

DOTUSD displayed a series of bearish formations throughout the 24-hour period, most notably a bearish engulfing pattern around 04:45–05:00 ET, as price gapped down from $3.858 to $3.818. This was followed by a shooting star at 09:30–10:00 ET, forming at $3.782, and a hammer at 11:00–11:15 ET, forming at $3.793. The price found temporary support at $3.806 and $3.782, with a final test of $3.753 in the last candle before 12:00 ET.

Moving Averages

On the 15-minute chart, the 20-period and 50-period moving averages remained bearish, with the 20SMA below the 50SMA, reinforcing a downward trend. On the daily chart, the 50/100/200 MA lines were not fully defined due to limited data, but the 24-hour trend was clearly bearish, with price closing below all three expected levels.

MACD & RSI

The 12-26-9 MACD line crossed below the signal line during the night session, indicating a shift in momentum. The histogram began to contract by the end of the session, suggesting a potential slowdown in the downtrend. The RSI dropped into the 30–35 range, reaching oversold territory, but failed to rebound above 40 even after the hammer formation, which may signal lingering bearish sentiment.

Bollinger Bands

Bollinger Bands expanded significantly during the 04:45–05:00 and 09:30–10:00 ET sessions, reflecting increased volatility. Price closed near the lower band, suggesting it may be near a short-term oversold zone. A potential bounce is possible if the 3.753 level holds and price retests the upper band near 3.818–3.830.

Volume & Turnover

Volume was relatively low throughout the session, with the exception of the 04:45–05:00 ET candle, which saw a large volume spike of 15.0 as price dropped from $3.858 to $3.818. Notional turnover followed a similar pattern, confirming the bearish price action during that period. Price and turnover appeared aligned, with no major divergences noted.

Fibonacci Retracements

Applying Fibonacci levels to the 3.899–3.753 swing, price found support at the 38.2% level ($3.831) and then at the 50% level ($3.826), before falling further to the 61.8% level ($3.802). The final support at $3.753 corresponds to the 78.6% retracement level, suggesting a possible short-term bounce or a deeper correction ahead.

Backtest Hypothesis

A potential backtest strategy could target short entries at the close of bearish engulfing patterns, with stop-loss placed just above the high of the formation and a take-profit at the nearest Fibonacci level or Bollinger Band. The hammer at 11:00 ET could also serve as a reversal signal, suggesting a long setup with a stop below the low and a target near the 3.793–3.806 range. Given the current setup, a combination of pattern-based entries and Fibonacci targets may offer a high-probability, low-risk strategy for traders.