Trade Recommendation: Bitcoin Cash/Ethereum
The Bitcoin Cash/Ethereum (BCH/ETH) pair looked bearish on January 2, 2018 when it took out support of 3.00. This triggered the double top pattern on the daily chart. The price action triggered many stop losses. As a result, BCH/ETH nosedived to as low as 1.1526 on February 1.
The good news is the market appears to be gaining strength. We have technicals to support our view.
Technical analysis show that Bitcoin Cash/Ethereum is creating an ascending broadening wedge on the daily chart. With each swing, the market creates more and more momentum by creating higher highs and higher lows. What’s impressive is that technical indicators have shown signs of sustainability so far.
First, the MACD has managed to stay above support of -0.07. On top of that, the RSI has managed to bounce every time it flashed oversold readings. Lastly, the daily candle has always stayed close to the 4-day, 8-day, and 21-day moving averages. There were little to no instances where all three moving averages were detached from the daily candle.
The strategy is to buy as close to 1.55 support as possible. If the market manages to stay above this level, the incoming rally will be huge. Initial target is 2.20. Take that out and we have a clear path to 3.00.
The process may take more than a month.
Daily Chart of Bitcoin Cash/Ethereum on Bitfinex
As of this writing, the BCH/ETH pair is trading at 1.5729 on Bitfinex.
Summary of Strategy
Buy: As close to 1.55 as possible.
Target: 2.20 first and then 3.00.
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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