【$DOT Signal】Short squeeze continues, 1H level strongly retests, aiming for a second surge

$DOT The 1H level has experienced a violent 37% rally and is currently in a strong consolidation phase. The price is moving sideways around 1.70, with the 1H K-line retesting the EMA20 (1.498) and finding support. RSI(1H) has fallen back from the overbought zone of 89.28, building momentum for a second upward push. The 4H level has broken through all moving averages with increased volume, forming a V-shaped reversal, indicating a strong trend. Open interest remains stable, funding rate is only 0.01%, showing no signs of overheating. The order book shows substantial buy-side depth (depth imbalance of 31.75%), indicating clear institutional support. This is a healthy retest after a short squeeze, not a top.

🎯Direction: Long (Long)

🎯Entry/Order: 1.695 - 1.705 (Reason: 1H EMA20 dynamic support zone and the lower boundary of the current consolidation platform, actively going long)

🛑Stop Loss: 1.650 (Reason: Break below the start of the strong 1H rally and the previous 4H candle low, invalidating the trend)

🚀Target 1: 1.780 (Reason: Previous high resistance and psychological barrier)

🚀Target 2: 1.850 (Reason: Daily chart previous high area and 1.618 Fibonacci extension level)

🛡️Trade Management:

- Position size suggestion: Standard position (Reason: 4H and 1H trend resonance, favorable risk-reward ratio)

- Execution strategy: After reaching 1.780, reduce position by 50% to lock in profits, and move the remaining stop loss up to the entry price of 1.705. If the price strongly breaks through 1.780, hold the remaining position for the second target.

Order book logic: This is a textbook short squeeze scenario. The 4H level shows three consecutive bullish candles with stable open interest, indicating that it’s not just short covering but new long positions entering. Although RSI on the 1H is high, no bearish divergence has formed, and support at EMA20 suggests a technical correction in a strong market. The buy-side depth far exceeds the sell-side, with large buy orders supporting the 1.68-1.69 zone, making downside resistance very strong. Combined with the daily trend, the price has broken a nearly one-month downtrend line, signaling a strong reversal.

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