Trade Recommendation: Bitcoin Cash
Our May 3, 2019 trade recommendation for Bitcoin Cash (BCH/USD) hit both targets. Those who followed the trade recommendation grew their investments by over 53 percent on May 14th when the market climbed as high as $410.92.
Bitcoin Cash exceeded our second target price. However, we weren’t worried because the market was showing overheated signals. At that point, the cryptocurrency was trading at extreme overbought territory. In addition, we spotted a large bearish divergence on the daily chart. It was only a matter of time before bears returned which they did on May 30th.
Now that the market is correcting, we have a chance to buy the dip.
Technical analysis shows that BCH/USD is headed to support of $310. This is the logical destination for the market considering that Bitcoin Cash struggled to above $310 for over a month. The retest of this level as support would be bullish.
Fortunately, the 100-day moving average is gliding close to $310. It will act as an additional support level to keep the price from falling further. Also, $310 is a long way down from the current price of the market. By the time BCH/USD taps that level, it will very likely be trading in oversold territory. That should provide the selling relief for a solid bounce.
The strategy is to be patient and buy on dips as close to $310 as possible. If bulls can stay above this level, they will likely generate a rally to our target of $485.
The process may take a month.
Daily Chart of Bitcoin Cash/US Dollar on Coinbase
Summary of Strategy
Buy: As close to $310 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.
Featured image courtesy of Shutterstock.