Trade Recommendation: aelf

The aelf/Bitcoin (ELF/BTC) pair took out resistance of 0.000058 on September 1, 2018. The breach enabled the pair to breakout from the large falling wedge pattern on daily chart. Unfortunately for breakout buyers, ELF/BTC immediately retraced. It even went as low as 0.00004593 on September 12.

Because of this price action, many would doubt the validity of the breakout. Some may even say that it was a bull trap. Be that as it may, what’s important is that ELF/BTC is showing signs of stability. This is the reason why we’re talking about this trade today.

Technical analysis shows that ELF/BTC appears to be creating a durable bottom at 0.00005 support. Bears tried their hardest to breach the support but they were exhausted. This enabled bulls to wrangle momentum away from them. You can see that the momentum is shifting as the RSI prints a bullish divergence.

An important thing to note is that the market dropped to 0.00005 support on August 14. So if ELF/BTC respects this area one more time, it can mean that a double bottom structure is in play.

The strategy is to buy as close to 0.00005 as possible. If bulls defend the support, they will attract the momentum needed to rally to our target of 0.000093.

The process may take a month.

Daily Chart of aelf/Bitcoin on Binance

As of this writing, the aelf/Bitcoin pair is trading at 0.0000512 on Binance.

Summary of Strategy

Buy: As close to 0.00005 support as possible.

Target: 0.000093

Stop: 0.000048

 

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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.