"How did you expect that dump?"
It's not about what comes after the drop that matters the most but what happened BEFORE the drop that you need to take note of.
To understand it simply, let's break it down:
âĄïž Surged so high could be 10%+.
âĄïž Getting closer to the previous rejected prices. Could be 40%+ however getting too close to the rejected price level such as 80% should make you think thrice if it's really a good time to enter a buy order.
âĄïž No 75%- correction from it's initial impulsive wave. All impulsive waves need corrections, most reaches only up to 50%-, some rare cases could be 75%-.
âĄïž Only once or twice has it attempted to breakout. This means, the initial and second attempt to breakout have 90% chance to fail as more sellers are awaiting the highest price in that certain period of time.
âĄïž Chart pattern indicates an aggressive bearish market sentiment. Sellers aren't coming into terms with buyers and prices need to be lower for another attempt of breaking out.
âĄïž Price is getting closer to resistance and getting far from support. May it be the minor supports/resistances or the major ones, identification of the current level of price should be important.
There are more to identify, although, these factors will greatly help you in identifying whether a token would most likely dump or not.
You have to keep a checklist in your mind, as a journal or any record to maintain your market sanity.
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