Trade Recommendation: Cardano
The Cardano Bitcoin (ADA/BTC) pair looked bearish on June 3, 2018 when it confirmed resistance of 0.00003. This negated the possible higher low set up at 0.000025 and drove the pair below that level on June 16. The price action triggered many stop losses which ignited a selling frenzy that saw ADA/BTC generate 10 red candles in 13 days.
The waterfall event pushed the pair to as low as 0.00001935 on June 29. While ADA/BTC lost over 35% of its value in less than a month, the good news is it appears that the worst is over.
Technical analysis show that Cardano/Bitcoin is about to breakout from a falling wedge pattern on the daily chart. This view comes after bulls defended 0.00002 support with above average volume. This suggests that 0.00002 is a zone where demand exceeds supply.
Moreover, indicators are flashing bullish signals. First, we see the Bollinger bands are contracting. With a narrow trading range and the pair hovering slightly above oversold levels on the daily RSI, it can be assumed that the incoming Bollinger bands expansion will favor the bulls.
In addition, we can see a strong possibility of a MACD bullish cross. This affirms our expectations of a strong rally and a breakout from the falling wedge pattern.
The strategy is to buy as close to 0.00002 support as possible. If bulls defend this support, they will likely ignite a rally that will take the market to our target of 0.00003.
The process may take less than month.
Daily Chart of Cardano/Bitcoin on Binance
As of this writing, the Cardano/Bitcoin pair is trading at 0.00002162 on Binance.
Summary of Strategy
Buy: Buy as close to 0.00002 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.