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Trade Recommendation: Bitcoin Cash

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Bitcoin Cash has been on the receiving end of the bears. From its highs of $4139.0893 on December 20, the cryptocurrency plunged about 81% by February 06. This shows the kind of damage the decline has done to the buy and hold investors.

Key points

  1. Bottom fishing is seen in Bitcoin Cash.
  2. It is likely to change its trend from down to range bound.
  3. Buy $1,400, SL $1,100, target $1,896 and $2,070

However, smart investors start cherry picking when others sell in a panic. We believe that Bitcoin Cash is showing signs of bottoming out, hence, is worthy of a buy.

Daily chart

In the short-term, Bitcoin Cash is trading inside the descending channel. In the long-term, the cryptocurrency has a stiff resistance at the downtrend line. Additionally, it has stayed below the 20-day EMA since January 16. All these point to a strong downtrend.

However, the bears could not build up on the breakdown of the critical support at $854. Though prices fell to a low of $778.2021 on February 06, it quickly rebounded about 79% to $1392.5405 on February 10.

Since then, the virtual currency has been trading inside a tight range. This is unlikely to continue for long. We expect a large range move to the upside that will propel the BCH/USD pair above the critical resistance zone, which has a confluence of resistance from the 20-day EMA, the downtrend line and the resistance line of the descending channel.

Once above this zone, a rally to the 50-day SMA of $1,896 and above it to $2,070 is likely.

Therefore, we suggest initiating long positions on a breakout above $1,400. The stop loss for the trade should be kept at the recent lows of $1,100. Traders should avoid purchasing below the specified levels.

Featured image courtesy of Shutterstock. 

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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4.7 stars on average, based on 9 rated postsRakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.




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8 Comments

8 Comments

  1. Brentc

    February 13, 2018 at 10:54 pm

    Rakesh, I love your analysis on everything but wouldn’t it be risky to buy anything right now just for the fact prices for alt coins hinge on what btc is valued at? Btc/bch/ltc/eth and the rest of them all trading similar to btc. Unless btc breaks out everything is risky unless there is a flippining to a different coin. What’s your thoughts?
    Thanks

    • Rakesh Upadhyay

      February 14, 2018 at 4:50 am

      Hello Brentc,

      You are correct. Considering that the cryptocurrencies are in a downtrend, it is risky to buy anything now.

      However, it is unlikely that a direct correlation of Bitcoin and altcoins will remain for long. The markets usually fall in two phases.

      1. The first phase is when bitcoin falls and drags the whole crypto universe along with it. We have seen this phase play out.

      2. The second phase is when bitcoin remains in a range or declines gradually, but selective altcoins outperform. We believe that as long as Bitcoin remains above $7500, this phase will play out.

      Therefore, we have recommended Bitcoin Cash above $1400, when it will turn positive in the short-term.

      At the bottoms, the markets are always uncertain, therefore, the position sizes should be reduced.

      With warm regards
      Rakesh Upadhyay

      • Brentc

        February 14, 2018 at 3:02 pm

        Thanks rakesh. You nailed Litecoin big time by the way thanks

        • Rakesh Upadhyay

          February 15, 2018 at 1:33 pm

          I sometimes get lucky, Brentc

  2. emceeanders

    February 14, 2018 at 6:16 pm

    Rakesh would you suggest waiting until the day closes above $1400 or just buy as soon as it hits?

    • Rakesh Upadhyay

      February 15, 2018 at 1:35 pm

      Hello emceeanders,

      The problem with Bitcoin Cash is that when it rallies, it doesn’t give us a second chance to buy it again. It just jumps. As the stop loss is not very large, I recommend buying it after waiting for a 4-hour period. If prices sustain above $1400 for 4-hours, please buy it.

      With warm regards
      Rakesh Upadhyay

  3. dopezone

    February 16, 2018 at 10:39 am

    Guess we are on! Goggogogoooo Rakesh you better be right. I know where your house lives.

    • Rakesh Upadhyay

      February 16, 2018 at 11:00 am

      Hello dopezone,

      Yes, we are on. Let’s see if we get the move to $1820, where you can book 50% of profits and hold the rest with a trailing stop, targeting $2070.

      With warm regards
      Rakesh Upadhyay

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Trade Recommendation: Litecoin

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The Litecoin/Bitcoin pair (LTC/BTC) dropped to as low as 0.00758498 on September 12, 2018. At that price level, the market was down by almost 70% from the 2018 peak of 0.02499999.

If you’ve been following our trade recommendations, you’d probably know that we like picking altcoin pairs that have suffered heavy losses. That’s because these pairs often have great bottom picking setups. More importantly, the bottom provides the maximum financial opportunity. We’re seeing that shape up in LTC/BTC.

Technical analysis shows that LTC/BTC is carving a bottom at 0.0082 support. While the pair is still trading inside a descending channel, we’re confident that it will break out of the pattern soon. We have a couple of technical reasons to support our view.

First, we can see multiple supports converging at 0.0082. We have the parabolic support, the uptrend support, and then the support of the descending channel. The convergence tells us to expect significantly increased demand at this level.

In addition, LTC/BTC is oversold on the weekly chart. Add the selling relief from oversold conditions to the surge in demand and we might see a breakout real soon. This is something that we’ve already seen in other altcoins such as XRP/BTC and XMR/BTC.

The strategy is to buy as close to 0.0082 support as possible. As long as the market stays above this level, it has the momentum to ascend to our target of 0.0115 first and then 0.014.

The process may take more than a month.

Daily Chart of Litecoin/Bitcoin on Poloniex

As of this writing, the Litecoin/Bitcoin pair is trading at 0.0082053 on Poloniex.

Summary of Strategy

Buy: As close to 0.0082 as possible.

Target: 0.0115 first and then 0.014.

Stop: 0.0078

 

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ 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 ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. 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.




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Trade Recommendation: EOS

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The EOS/Bitcoin pair (EOS/BTC) took out resistance of 0.000785 on August 28, 2018. This triggered the breakout from the large falling wedge on the daily chart. The price movement attracted breakout traders who helped generate a rally to 0.0009544 on September 1.

At that price level, breakout players and bottom fishers started to lock-in gains. The increased supply in the market drove the pair to as low as 0.000752 on September 17. Those who bought the top of the market would have been forced to cut their losses as the pair went below the breakout. The reality, however, is that this pullback is temporary.

Technical analysis shows that the uptrend of EOS/BTC remains intact. This view comes after we saw the pair respecting the uptrend support. Notice how the market just continues to glide up this level. This tells us that bulls will defend the support even if the market is pulling back.

In addition, we can see the 30-day, 60-day, and 90-day moving averages preparing to go below the daily candle. This is an encouraging sign. EOS/BTC launched a parabolic run the last time these three moving averages all went below the daily candle. We’re hoping for the same once this consolidation is over.

The strategy is to buy as close to 0.00082 support as possible. As long as the market stays above the uptrend support, it has the momentum to climb to our target of 0.0012466.

The process may take a month.

Daily Chart of EOS/Bitcoin on Binance

As of this writing, the EOS/Bitcoin pair is trading at 0.0008324 on Binance.

Summary of Strategy

Buy: As close to 0.00082 as possible.

Target: 0.0012466

Stop: 0.00078

 

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ 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 ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. 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.




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Trade Recommendation: NEO/Ethereum

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The NEO/Ethereum (NEO/ETH) pair took out resistance of 0.07 on August 31, 2018. This triggered the breakout from the large falling wedge on the daily chart. The price action attracted breakout players and momentum traders who helped push the pair to as high as 0.099934 on September 12.

Although we missed the breakout rally, we’re confident that we’ll be able to buy the dip. After all, NEO/ETH was already trading at extreme overbought territory. It would be foolish to chase a flying altcoin. We’d rather wait for the pullback and see how the market plans to resume its uptrend. It looks like we’re getting the go signal.

Technical analysis shows that NEO/ETH has just taken out resistance of 0.08. This enabled the pair to break out of the bullish pennant on the daily chart. The breakout looks convincing because of serious volume. On October 18, the market breached the resistance with volume that’s over 180% of its average.

In addition, the 30-day, 60-day, and 90-day moving averages are all lining up below the candles. This is an uncommon alignment indicating that the uptrend is strong and healthy.

The strategy is to buy the retest of breakout as close to 0.08 as possible. As long as the market stays above this level, it has all the momentum it needs to rally to our target of 0.115. The process may take a month.

Daily Chart of NEO/Ethereum on Binance

As of this writing, the NEO/ETH pair is trading at 0.081214 on Binance.

Summary of Strategy

Buy: As close to 0.08 as possible.

Target: 0.115

Stop: 0.076

 

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.

Important: Never invest (trade with) money you can't afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here. Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here. Best regards, Jonas Borchgrevink.

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3.7 stars on average, based on 252 rated postsKiril is a financial professional with 4+ 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 ETFs, as he does his own crypto research and is the subject matter expert at ETFdb.com. 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.




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