Trade Recommendation: Bytecoin

The Bytecoin/Bitcoin pair (BCN/BTC) started correcting on May 23 when it took out support of 0.000001. This triggered many stop losses as those who bought above 0.000001 had to dump positions and preserve their capital. The pair has been dropping since but it seems that the worst is behind for the market.

Technical analysis show that Bytecoin/Bitcoin is about to bottom out. We have several reasons to support this view.

First, BCN/BTC is about to touch a key support line, which it has respected since late 2017. Whenever the pair hits this support, it consolidates for some time before sharply rallying. Currently, we can see BCN/BTC consolidating just above the support.

Second, the market has quietly broken out of a falling wedge pattern. Technical indicators are affirming the strength of this breakout. The daily RSI appears to have created a bullish higher low at 38. On top of that, we can see a bullish cross on the MACD.

The strategy is to buy as close to 0.0000004 as possible. If bulls manage to preserve the long-term support, the market would attract a lot of momentum. The new higher low might ignite a rally to our target of 0.0000006. Take that out and we have a clear path to 0.000001.

The process may take more than a month.

Daily Chart of Bytecoin/Bitcoin on Poloniex

As of this writing, the BCN/BTC pair is trading at 0.00000043 on Poloniex.

Summary of Strategy

Buy: As close to 0.0000004 as possible.

Target: 0.0000006 and then 0.0000010.

Stop: 0.00000035

 

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.