Trade Recommendation: Bitcoin
On our August 18, 2018 trade recommendation, we notified our readers to sell as soon as Bitcoin (BTC/USD) hit $7,400. The target was hit on September 4 when the market went as high as $7402.50. We hope you were able to sell close to the target because BTC immediately corrected after it hit the resistance. We had this view that the move to $7,400 is another pump and dump rally because Bitcoin was forming the last legs of its reversal pattern.
Technical analysis shows that Bitcoin is about to break out from a symmetrical triangle on the daily chart. This formation started to show promise after BTC generated a higher low setup of $6,106.37 on September 19. The higher low appears to be the conclusion of the E wave, which is the last leg down of the triangle.
With a higher low in place, the next step is to take out the resistance of $6,800. From the looks of it, the breakout appears to be only a matter of time.
The strategy is to buy the breakout at $6,800 after the market prints volume of 10,000 Bitcoins. The breakout would signal the end of the correction. Thus, bears will try their best to keep market control. Bitcoin needs buyers to absorb the expected heavy selling.
Once breakout is complete, initial target is $9,800. The process may take a month.
Daily Chart of Bitcoin/US Dollar on Coinbase
As of this writing, the Bitcoin/US Dollar pair is trading at $6,599.01 on Coinbase.
Summary of Strategy
Buy: Breakout at $6,800 after volume of 10,000 Bitcoins in met.
Stop: $6550 after the breakout.
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.