Trade Recommendation: Bitcoin
Our June 27, 2018 trade recommendation for Bitcoin/US Dollar (BTC/USD) was right on the money. We called the bottom at $5,800 when others forecasted a fall to $4,000 levels or even lower. On top of that, we predicted that Bitcoin would get to $8,000 within a month.
Even though Bitcoin overshot our target, we expected that a slight correction would take place to keep the bull run sustainable. The pair went as high as $8,488 on July 24 but it has been correcting since. This is actually good news for bulls as it gives Bitcoin the opportunity to generate another higher low setup. More importantly, it gives you a chance to buy the dip.
Technical analysis show that BTC/USD is exhausted and needs to retrace to give technical indicators a chance to cool off. Bitcoin is in overbought territory on the daily chart. Plus, the 4-hour chart is flashing a bearish divergence.
The timing of the retracement is perfect too, as the pair was sent back by a resistance level that once stood as a key support. Nevertheless, the market remains bullish thanks to its recent breakout from a large falling wedge pattern. The former resistance of the wedge is now our immediate support.
The strategy is to buy as close to $7,400 support as possible. If bulls succeed in defending the support, it could spark a strong rally that can take the pair to our target of $9,600. Sell immediately once the target is hit.
The process may take a month.
Daily Chart of Bitcoin on Coinbase
As of this writing, the BTC/USD pair is trading at $8,198.29 on Coinbase.
Summary of Strategy
Buy: As close to $7,400 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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