Trade Recommendation: Bitcoin Gold
Bitcoin Gold (BTG/USD) has been on our radar ever since it breached our range midpoint of $12.85 on January 10, 2019. At that point, we were fairly certain that the market will head to our range low of $9.10. Bitcoin Gold’s inability to stay above $12.85 was a clear signal that the market is still in accumulation mode. This may be bad news to participants who were playing for the breakout. However, this is likely a golden opportunity for bottom-pickers.
Technical analysis shows that BTG/USD is currently trading inside a descending channel on the daily chart. This suggests that the market is bearish in the short-term. However, the price of Bitcoin Gold has been driven down close to our support of $9.10. This is likely to spark the interest of bottom-pickers and bargain hunters. Our technical indicators are supporting this view.
First, volume on January 28, 2019 surged significantly as the market dropped below our support of $9.10. This tells us that bears tried to take out the support but bulls were able to hold their ground. As a result, the market printed a candle with a long wick below its body to indicate the rejection of lower prices.
In addition, we can see the daily RSI generate a large bullish divergence. This is a reliable signal that a reversal is on the horizon. Lastly, the market is currently trading in oversold territory. The selling relief combined with the expected demand increase at $9.10 will likely enable Bitcoin Gold to break out of the descending channel.
The strategy is to buy as close to $9.10 as possible. As long as BTG/USD trades above this level, it will likely rally to our range midpoint of $12.85. Take that out and the next target is $16.50.
The process may take less than a month.
Daily Chart of Bitcoin Gold/US Dollar on Bitfinex
As of this writing, the Bitcoin Gold/US Dollar pair is trading at $9.72 on Bitfinex.
Summary of Strategy
Buy: As close to $9.10 as possible.
Targets: $12.85 and 16.50.
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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