Trade Recommendation: Bread
The cryptocurrency markets, especially altcoins are facing a brutal week. So many pairs are either in oversold or extreme oversold territory. While it may look scary to enter long positions at this point, it’s actually a good idea to be a contrarian. The immense selling in the past few days puts bulls in a good position to annihilate short positions.
In line with that, we believe Bread/Bitcoin (BRD/BTC) is poised for a strong rally.
Technical analysis show that BRD/BTC looks ready to break out of a large falling wedge on the daily chart. Yesterday’s pin bar candlestick supports this assumption. This shows that bottom pickers are buying the support.
In addition, we can see a bullish divergence on the daily RSI. This also affirms the idea that the market is gaining bullish momentum.
Lastly, the pair appears to be at the apex or at least near the apex of the falling wedge. With a bounce underway, bears would be hard-pressed to generate a lower high that’s so close to the support.
The strategy is to buy the breakout at 0.000055 after the pair prints volume of more than 2.3 million Bread units. Bears will try to put up a fight to keep market control. BRD/BTC needs buyers to absorb the selling pressure.
Once breakout is complete, the ensuing rally would likely take the pair to our target of 0.000075.
The process can take less than one month.
Daily Chart of Bread/Bitcoin on Binance
As of this writing, the Bread/Bitcoin pair is trading at 0.00004612 on Binance.
Summary of Strategy
Buy: Breakout at 0.000055 with volume of 2.3 million Bread units.
Stop: 0.0000524 after breakout.
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.