The mark of $6 on the DOT market was not as simple as it seemed at first glance. Despite the positive news background and the good growth dynamics of the entire DeFi market, we saw a sharp DOT price correction.
However, in reality there were some preconditions that indicated the market for future price reductions.
To begin with, it is worth noting that the gradual DOT fall began a day earlier than the current main crypto market coin – BTC.
If on 25 November the BTC price updated the local high, the DOT market has already had the first wave of fall:
In the previous article we wrote the main condition for the DOT price correction beginning – $5.59 mark break. On the chart we see that after breaking this mark, buyers at low volumes tried to regain lost territory.
Though, their weak growth only inspired sellers to continue dominating. It was after breaking $5.59 that the DOT price like a stone fell by 20%.
When did buyers start saving the situation?
During the fall, buyers took a beat in the range $4.7-4.8. The chart shows that in this range the price was sharply redeemed slowing down the powerful locomotive of sellers. As a result of short-term consolidation in this range, liquidity has accumulated, which can help sellers continue the downward trend.
At the moment, trading volumes in the DOT market have significantly decreased. The price is below the critical range $4.7-4.8. So far we do not see buyers’ activity. While there are still many sellers on the market – the best way to change the trend is to buy out their entire offer at local lows. Therefore, a positive scenario for sellers will be the continuation of consolidation with further fixing above $4.7-4.8.
Negative scenario for DOT
Looking at the daily timeframe, the price has the prospect of the fall continuation to $4.2. For this scenario, sellers need to overcome the mark $4.5 over the weekend.
This mark kept the DOT price for two months, not allowing it to continue to grow. In two days, we did not see much interest from buyers to keep it firmly and organize a counterattack.
Thus, this mark is the last frontier and the hope of buyers for a radical change in the DOT market situation.