The supply zone that we identified in last week’s analysis has once again proved to be too strong for DOT to break through. The bears came in full force near the supply zone at $8.5, causing the price to dive straight to the crucial support level at $6.50.
After approaching the support at $6.63 DOT has been trading in a very tight range. A reversal must be seen soon. Otherwise, the support will keep getting weaker, resulting in a breakdown. If this support is not held, we can expect a new 52-week low to be set by DOT. A slight RSI divergence that is hinting towards a reversal is also visible. However, the buying volumes are currently nowhere to be seen.
This is why traders should avoid buying DOT until it is able to register a strong bounce from the support level. Once a bounce is seen, we can confirm the formation of a triple bottom pattern. Traders then can set targets at the supply zone at $8.50. It is important for traders to be patient and wait for a clear reversal before buying DOT as a breakdown could still be seen.
After approaching the support at $6.63 DOT has been trading in a very tight range. A reversal must be seen soon. Otherwise, the support will keep getting weaker, resulting in a breakdown. If this support is not held, we can expect a new 52-week low to be set by DOT. A slight RSI divergence that is hinting towards a reversal is also visible. However, the buying volumes are currently nowhere to be seen.
This is why traders should avoid buying DOT until it is able to register a strong bounce from the support level. Once a bounce is seen, we can confirm the formation of a triple bottom pattern. Traders then can set targets at the supply zone at $8.50. It is important for traders to be patient and wait for a clear reversal before buying DOT as a breakdown could still be seen.