- DOT approaches the crucial $3.74 support, with a potential reversal if it holds strong.
- Rising social volume and Open Interest indicate growing investor attention and optimism for a bounce.
Polkadot [DOT] is currently facing a pivotal moment in its price action, approaching the critical $3.74 support level, which could determine its next major price move.
At press time, Polkadot was trading at $4.78, reflecting a 1.59% increase.
The cryptocurrency has recently faced downward pressure, which has brought it closer to key support zones.
However, the real question is whether $3.74 will act as a strong enough support to fuel a reversal or if DOT will break lower and trigger further declines.
What are the key levels to watch for DOT?
Polkadot’s price has been in a downward trend for the past few weeks, with the recent movement pushing it closer to the $3.74 support.
This level has previously been a strong area for buying, and many expect it to play a crucial role in future price action.
Should this support level hold, it could provide the catalyst for a reversal, with potential upside targets at $5.25 and $6.50.
However, if the price breaks below $3.74, DOT could experience further declines, possibly reaching the $3.50 level before any significant rebound occurs.
Source: TradingView
Polkadot gains momentum
In addition to price action, social dominance and social volume for DOT have been steadily rising. On the 19th of February, social volume reached 92, indicating increasing attention on the cryptocurrency.
The rising social dominance, at 0.4417% at press time, suggested that Polkadot was gaining momentum in the digital currency space.
These rising metrics could indicate heightened investor interest, which may lead to increased buying activity if the price bounces from key levels.
Therefore, despite recent market weakness, the growing social presence of DOT could provide a significant boost to its price in the near term.
Source: Santiment
Market sentiment affects DOT
Polkadot’s market sentiment is shaped by both Open Interest and the Long/Short Ratio. Open Interest has increased by 1.68%, reaching $316.51 million at press time, suggesting that more traders were entering the market.
This rise in Open Interest indicated anticipation of a significant price move, whether upward or downward. Furthermore, the DOT Long/Short ratio was balanced, with a slight edge toward long positions at 50.95%.
This indicated that investors were hopeful for a bullish reversal, but uncertainty lingered due to the ongoing downtrend.
Therefore, market participants will be keeping a close eye on the $3.74 support level to determine the next move.
Source: Coinglass
Can $3.74 be Polkadot’s turning point?
Polkadot’s price is at a critical juncture. With rising social dominance and volume, along with increased Open Interest, there is a chance that the $3.74 support level will hold and trigger a bullish reversal.
However, if this level breaks down, DOT could experience further declines. In conclusion, if $3.74 holds, Polkadot will likely rebound toward higher price levels. If not, further downside is possible.
