You must allow for the early price being an error. The odds compilers and the early birds have taken a position on the price which is generous to say the least. The initial move from ~5.50 into ~3.x was the result of very little money and I for one could never hope to trade that move. The real move was from the low 3.x prices down to 2.60, at the lower prices there was a thin element to the money. What does that mean?Starting from 5.50 and moving into 2.60 is a huge move
Layers are not all stupid, they are not going to stand in the way of a moving train. Very often you will see them moving their positions as they try to judge the low. Yes, some will just pile in trying to halt the move but they won't last long. If the market wants to move down it will move down, period! So the shrewd layers get out of the way...they abstain you could say! This moves the price quite quickly and the money traded drops slightly.
The next phase is driven slightly more by followers, the kind of traders who react to a market. They miss the initial move because they are unsure and by the time their brain has accepted a steam they join in and it gives the move a longer life. This is why we see a slight retrace as indecision kicks in. This is normal behaviour, there is no dark force at work.
So 3.20 into 2.60 is a realistic move but the money from ~2.70 down to 2.60 starts to thin out as backers loses interest and the bulk of the money is from followers coming to the party just as everyone is leaving.
