Trade Recommendation: Bitcoin Cash
From a long-term perspective, the Bitcoin Cash/Bitcoin (BCH/BTC) pair has been in sideways consolidation. It has been trading in a wide range between 0.25 and 0.05 since August 2017. Traders who can identify key support and resistance levels within the range can spot profitable trading opportunities.
As BCH/BTC continues to slide, it approaches a reliable support area. That’s where we can bottom fish the market.
A look at the daily chart of BCH/BTC reveals that the pair bounces off support of 0.093. It has been doing so since December 2017. Interestingly, the bounce happened after the market broke out of a falling wedge. This happened twice before and there’s a case to be made for a potential third occurrence.
As of this writing, the pair is approaching the 0.093 support level, which is also the narrowest point of the wedge. While this is happening, BCH/BTC is beginning to flash oversold readings as well. The selling relief plus the increased demand are the catalysts for the breakout.
The strategy is to buy as close to 0.093 support as possible. If the market stays on top of the support, a quick rally to our initial target of 0.14 is likely.
The process may take less than a month.
Daily Chart of Bitcoin Cash/Bitcoin on Bitfinex
As of this writing, the BCH/BTC pair is trading at 0.09949 on Bitfinex.
Summary of Strategy
Buy: As close to 0.093 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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