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.

Target: $40

Stop: $17.50

 

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.

Featured image courtesy of Shutterstock.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.