Trade Recommendation: Bitcoin Gold
Bitcoin Gold (BTG/USD) dropped to as low as $13.21 on August 14, 2018. At that price point, BTG was down by over 96% from the 2018 high of $370. The plummet in seven months is mindblowing. If BTG was a stock, everyone would think that the company was basically bankrupt.
It’s a good thing that BTG is a cryptocurrency and not any other asset. While a 96 percent dive is a tremendous loss, it does not mean that the altcoin is out of the game. On the contrary, it appears to be preparing to make a statement.
Technical analysis shows that Bitcoin Gold breached resistance of $21 on August 29. This triggered the breakout from the large falling wedge on the daily chart. Unfortunately, the breakout did not really have legs. The rally topped off at $24.20 on September 5 before bottom pickers took profits.
What’s actually interesting is how bulls defended the new support. As heavy selling commenced, bulls kept the market above $19 support on September 5. In doing so, the market printed volume that’s over 240% of its daily average.
The strategy is to buy as close to $19 support as possible. If bulls can defend this area, they will likely ignite a strong rally to our target of $40. 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 $19.356 on Bitfinex.
Summary of Strategy
Buy: As close to $19 support 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.