Polkadot News Today: Polkadot tests key $3.75 support after Fibonacci pullback signals bullish potential

Polkadot (DOT) is currently testing critical support at $3.75 following a pullback from a key Fibonacci retracement level, a development that could signal a potential continuation of its bullish trend. The asset’s price action indicates a "healthy correction," as described by analysts, which may reset momentum indicators and establish a new demand zone for buyers. This pullback follows an impulsive upward move where DOT reclaimed significant levels, setting the stage for a possible higher low formation if the $3.75 threshold holds [1].

The $3.75 level represents a high-confluence zone, having previously acted as resistance before flipping into support after a breakout. This area also aligns with the value area low, enhancing its technical significance as a potential catalyst for a bullish rebound. Analysts emphasize that a successful retest of this level could confirm it as a structural higher low, reinforcing the asset’s overall bullish structure [1]. If buyers defend this support, the price may target the local high near $5 and potentially extend toward $7.67, a historical cap for upward moves within this trading range [1].

The current price action underscores the importance of momentum and volume confirmation in validating the next upward leg. A sustained bounce from $3.75 would require strong volume to signal conviction, while a failure to hold this level could open the door for a deeper correction. The market’s higher-time-frame structure remains intact, with bullish conditions prevailing as long as the price remains above $3.75. A reclamation of $5 with volume support would further strengthen the case for a broader rally, whereas a breakdown below the key support would shift the near-term outlook to bearish territory [1].

Technical analysis highlights the necessity of this correction in maintaining a balanced price trajectory. The pullback provides an opportunity for sellers to absorb supply at lower levels while buyers prepare for a potential continuation of the uptrend. The confluence of Fibonacci levels, value area metrics, and historical price behavior all point to $3.75 as a critical juncture for DOT’s short-term direction [1].

Market participants are advised to monitor the $3.75 level closely, as its performance will likely dictate the immediate trajectory of the asset. A higher low formation here would align with broader bullish expectations, while a breakdown would necessitate a reassessment of the trend.

Source: [1] [title: Polkadot approaches key support at $3.75 after healthy pullback] [url: https://coinmarketcap.com/community/articles/68810ba9e8ba3c229f16c5b8/]