Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- DOT price action graced a crucial demand zone around USD 4.5.
- Liquidation data discouraged long positions, but short positions also suffered.
Dot [DOT] was at a significant discount level and at a long-term buying opportunity support level. But a corrective uptick remained elusive, which could upset impatient bulls.
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DOT was trading at $4.43 at the time of writing. The level was an extension of the range formation ($4.0 – $4.55) since Aug. 18. However, the band formation coincided with a crucial long-term support and a weekly bullish order block (OB).
What is the next step after consolidation?
Source: DOT/USDT on TradingView
The demand zone is a weekly bullish OB of $4.22 – $4.59 (cyan) and doubled from the January and December lows. The rally in the first quarter recovered from above levels and a similar trend was observed during the recovery in June.
But a retest in August failed to show a solid corrective recovery from the demand zone. A price consolidation has been going on for over a week with no signs of a price reversal.
However, the CMF fluctuated above zero, underlining weak but positive capital inflows. The RSI also attempted to pull out of the oversold zone, showing mild buying pressure, yet the sellers were in overall control.
So DOT could shoot to $5 or $5.2 in the coming days/weeks, especially if Bitcoin [BTC] rises above $26.8k and $27k. But the bulls need to clear the $4.8 to get an additional lead.
Conversely, a break below the demand zone will expose DOT to a possible depreciation to the USD 4.0 level.
Long discouraged
Source: Coinglass
How many Worth 1,10,100 DOT today?
At the time of writing, long positions were discouraged. According to Mint glass According to the liquidation data, over $55,000 longs broke compared to >$20,000 shorts within 12 hours before publication time.
The difference between short and long liquidations was not too great, indicating a likely formation of a wider range. But BTC’s muted movement could delay a solid corrective recovery, so it’s worth following the price action.