- Polkadot’s price approached oversold territory as bulls defended $3.35 support.
- Negative funding and rising Open Interest hinted at incoming volatility despite bearish liquidations.
Polkadot [DOT] has been under intense selling pressure over the past few weeks, yet market participants are beginning to spot signs of potential recovery.
While DOT has struggled to gain upside momentum, on-chain and technical indicators suggest a possible shift in sentiment.
At press time, DOT was trading at $3.47, reflecting a 3.10% drop over the past 24 hours. Despite this decline, a key support level has held strong, hinting that buyers may be preparing for a counter-attack.
Is DOT ready to bounce from oversold conditions?
DOT recently bounced from the $3.35 support, which aligns with historical demand zones. This rebound occurred just as the RSI touched 31.50, signaling oversold conditions.
Therefore, a short-term reversal remains a strong possibility if bulls defend this support level.
However, a failure to stay above $3.35 could open doors to further downside. For now, traders are watching the $4.61 resistance level closely. A daily candle close above this zone would confirm a bullish trend reversal.
Additionally, such a move could trigger further momentum toward the $5.00 and $5.38 price targets. Price structure suggests a possible W-shaped recovery pattern in the making.
Source: TradingView
Who’s getting liquidated?
At press time, liquidation data showed a significant imbalance, with $754.48K in long positions wiped out versus only $32.84K in shorts.
This indicates that bullish traders were overly leveraged and caught offside by the recent dip.
Such a large liquidation of longs reinforces bearish short-term momentum and shows that buyers lacked strength during the downturn.
Most of these liquidations occurred on Bybit, Binance, and OKX—exchanges with high retail participation. Therefore, the data suggests that retail optimism got flushed out aggressively.
As long as liquidations remain skewed this way, it’s clear that the market hasn’t fully shifted in favor of the bulls.
Source: Coinglass
Are the bulls finding support?
Funding Rates from Binance showed a sharp decline to -0.007954% as of the 9th of April. This negative rate signaled that short sellers had dominated the market.
However, overly bearish sentiment often becomes a contrarian indicator. If prices start climbing, short sellers may rush to exit, triggering a short squeeze.
Source: Santiment
Additionally, DOT’s Open Interest has risen by 3.26% to $305.42M. This increase reflects growing interest and positions being built, which often precedes strong price moves.
When rising Open Interest combines with negative funding, the setup for volatility strengthens.
Can Polkadot’s price reclaim $4.60?
DOT has a real opportunity to reclaim $4.60, but the road ahead remains uncertain. On the bearish side, the sharp rise in long liquidations signals weak buyer control and lingering sell pressure.
Price action remains sluggish, with repeated failures to break key resistance and no strong bullish candle confirming reversal. Additionally, sentiment remains cautious, as sellers continue dominating short-term moves.
However, the surge in Open Interest and deeply negative Funding Rates could fuel volatility and increase the odds of a reversal—especially if bulls defend the $3.35 support convincingly.
Therefore, if momentum shifts in favor of buyers, a breakout above $4.60 becomes a realistic short-term target.
