【$DOT Signal】Hold cash and wait for valid reversal signals in a downtrend

$DOT In a prolonged downtrend, the market is weakly consolidating, with the price firmly suppressed by EMA20. The deep imbalance indicates heavy selling pressure above, currently only a continuation of the decline, with no effective reversal structure observed.

🎯Direction: Hold cash (NoPosition)

Market analysis: The price is fluctuating narrowly between 1.26 and 1.29, but EMA20 (1.312) forms a clear dynamic resistance. The daily trend is clearly downward, falling from 2.28 to 1.28, a decline of nearly 44%, with no signs of a weekly-level bottom.

Hardcore logic: The key bearish logic lies in the market microstructure. The order book depth imbalance is as high as 18.02% (sell orders far exceed buy orders), with buy orders concentrated at lower levels (1.26-1.27), indicating the market has no intention of actively absorbing at this price. The 4H candlestick buy/sell ratio remains below 0.5, showing the decline is driven by genuine sell orders.

Although the funding rate is positive (0.0049%), the open interest (OI) remains stable rather than decreasing. Coupled with the price’s downward movement, this is not short-squeezing but rather longs being passively holding through ongoing losses, accumulating liquidity for further decline. RSI at 38.49 is in the weak zone but not oversold, leaving room for further downside.

Trading plan: Currently, the structure favors contrarian long positions, but short positions have poor risk-reward (support levels are too close). One must wait for one of two signals: 1. A strong volume breakout and stabilization above EMA20 (1.312), confirming trend reversal. 2. A rapid drop below 1.20 into a key liquidity zone (near previous lows), with panic selling leading to volume-price divergence and buy absorption, then consider a left-side entry. Otherwise, holding cash and waiting is the only positive expectation.

Trade here 👇 $DOT

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