Polkadot Testing Critical Support at $3.45 Amid Oversold Conditions

I observe that Polkadot's price is currently testing the $3.45 support level, which is a crucial point to watch. The recent trading activity shows DOT at approximately $3.58, marking a 1.65% decline over the last 24 hours. The RSI indicator stands at 38.17, indicating that the cryptocurrency is in oversold territory, which raises the possibility of a bounce or reversal soon.

Such oversold conditions often suggest that the selling pressure might be nearing exhaustion, and traders could see this as a buying opportunity if a bullish reversal occurs. The support level at $3.45 is significant because if the price holds here, it may lead to a short-term bounce, especially with oversold RSI suggesting a potential rally. Failure to maintain this support could result in further declines towards lower support levels.

It's essential to consider that market conditions and broader crypto sentiment can influence this potential bounce. If momentum shifts favorably, and the price respects the support at $3.45, it could target a recovery, possibly retesting higher resistance levels. Conversely, if the support breaks, a more extended downside correction might ensue.