Trade Recommendation: 0x (ZRX)
The 0x/US Dollar (ZRX/USD) pair took out resistance of $0.80 on October 16, 2018. This triggered the breakout from the large descending triangle on the daily chart. The breakout looked convincing, too, as the market generated a strong rally on October 17. ZRX got an influx of volume that’s over 500% of its daily average. This enabled the market to rally to as high as $1.0868.
At that point, the pair was in extreme overbought territory. Those who bought at the bottom and at the breakout took the chance to lock-in some of their gains. This drove the pair down to 0.8537 on October 18. While the pair is currently pulling back, this is actually one of the best opportunities to enter long positions.
Technical analysis shows that ZRX is currently consolidating inside a bullish continuation pattern on the daily chart. What’s more important, however, is that it just generated its first higher high in months. With a higher high in place, the market is now trading inside an ascending channel. This gives us the expectation that ZRX will resume its uptrend once consolidation is over.
Also, an interesting thing to note is that the 30-day, 60-day, and 90-day moving averages are all below the daily candles. The last time this happened, ZRX went into a parabolic run.
The strategy is to buy on dips as close to $0.80 as possible. ZRX will likely continue its pullback to give technical indicators a chance cool off. As long as the market stays above the breakout, it has the chance to rally to our targets of $1.20 and $1.45.
The process may take more than a month.
Daily Chart of 0x/US Dollar on Bitfinex
As of this writing, the 0x/US Dollar pair is trading at $0.887 on Bitfinex.
Summary of Strategy
Buy: On dips as close to $0.80 as possible.
Target: $1.20 first and then $1.45.
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.
Featured image courtesy of Shutterstock.