Trade Recommendation: 0x (ZRX)
0x (ZRX/USD) has been on our radar since it breached support of $0.455 on November 19, 2018. At that point, we were interested in seeing whether 0x would recover the support. Bulls attempted to reclaim that price level twice but they were sent back on both occasions. As a result, this coin stumbled as it struggled to find its footing. After all, the market had no known support below $0.455 on Bitfinex.
The good news is that 0x is showing bullish signals. These signals tell us that the market is ripe for bottom picking.
Technical analysis shows that ZRX/USD is likely to carve a bottom at $0.22. This view came after the altcoin printed a yearly low of $0.2199 on February 6, 2019. The market immediately bounced after touching this level. Although it is very possible for ZRX to print a new low, the formation of a falling wedge on the daily chart makes us think otherwise. The wedge has been forming for over two months and its apex appears to be at $0.22.
Also, it is important to note that 0x is generating a large bullish divergence on the daily chart. This indicates that the market is slowly gathering bullish steam even though the price continues to fall.
The strategy is to buy on dips as close to $0.22 as possible. As long as 0x trades above this level, bulls will likely gather the momentum to hit our initial target of $0.3375.
The process may take less than a month.
Daily Chart of 0x/US Dollar on Bitfinex
As of this writing, the 0x/US Dollar pair is trading at $0.2344 on Bitfinex.
Summary of Strategy
Buy: As close to $0.22 as possible.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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