Trade Recommendation: Bitcoin Cash
We’ve been watching Bitcoin Cash (BCH/USD) for some time now. The market piqued our interest when it formed an Adam and Eve double bottom pattern on the daily chart. This trend reversal structure was under construction for about five months. In cryptocurrency investing, that’s more than enough time build a base that will serve as the foundation of the next bull run.
Bitcoin Cash really caught our attention on April 2, 2019 when it took out resistance of $230. This ignited a strong breakout rally that drove the market to as high as $354.17 on April 3rd. Since then, the market has been correcting but this gives us the chance to buy the dip.
Technical analysis shows that BCH/USD has successfully retested support of $230. This view comes after the market refused to close below this level on April 29th. On that day, Bitcoin Cash dropped to as low as $227.40 but bulls bought the dip and lifted the market above the support.
A day after that, we saw a golden cross between the 50-day moving average and the 200-day MA. This crossover is a strong indicator that the market has turned bullish. Participants have responded well by pushing the price to $277.32 on May 1st. However, the rally has been stalled as buyers lost steam. This tells us that BCH will likely retest $230 in the next few days.
The strategy is to buy on dips as close to $230 as possible. If bulls can stay above this level, they will likely generate a rally to our targets of $355 and $410.
The process may take a month.
Daily Chart of Bitcoin Cash/US Dollar on Coinbase
As of this writing, the Bitcoin Cash/US Dollar pair is trading at $289.40 on Coinbase.
Summary of Strategy
Buy: As close to $230 as possible.
Targets: $355 and $410.
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.