DOT traded at $4.43 at the time of writing. The level was an extension of its range formation ($4.0 – $4.55) since 18 August. However, the range formation coincide#d with a crucial long-term support and weekly bullish order block (OB).
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What’s next after the consolidation?
The demand zone is a weekly bullish OB of $4.22 – $4.59 (cyan) and doubled up as January and December lows. The Q1 rally bounced from the above level, and a similar trend was observed during the June recovery.
But another August retest was yet to record a solid corrective rebound from the demand zone. A price consolidation has extended for over a week without signs of a price reversal.
However, the CMF fluctuated above zero, underscoring weak but positive capital inflows. The RSI also attempted to retreat from the oversold zone, demonstrating mild buying pressure, yet sellers had overall control.
So, DOT could shoot to $5 or $5.2 in the next few days/weeks, especially if Bitcoin [BTC] surges above $26.8k and $27k. But the bulls must clear the $4.8 to gain an extra edge.
Conversely, a breach below the demand zone will expose DOT to possible depreciation to the $4.0 level.
Longs discouraged
At the time of writing, long positions were discouraged. According to Coinglass’s liquidation data, over $55k longs were wrecked compared to >$20k shorts within 12 hours before publication time.
The difference between short and long liquidations wasn’t too large, suggesting likely extended range formation. But BTC’s muted movement could delay a solid corrective rebound, so it’s worth tracking its price action.