Trade Recommendation: Chainlink
Our October 04, 2018 trade recommendation for Chainlink/Bitcoin (LINK/BTC) hit its mark on October 23, 2018 when the market rallied to 7,499 satoshis. Those who followed the trade recommendation grew their investments by over 50%. If you did not catch that ride, don’t fret because Chainlink is giving us another opportunity. This one may be bigger.
Technical analysis shows that LINK/BTC has taken out resistance of 6,700 satoshis on October 30. This triggered the breakout from the large inverse head and shoulders pattern on the 4-hour chart. The breakout looked solid because it generated a powerful follow through that enabled the market to climb as high as 9,242 satoshis on November 1.
At that point, however, the market showed signs that a short-term top was in place. There was a bearish divergence on the 4-hour chart. In addition, the candle created a long wick above its body. This was a clear signal that profit-taking was commencing.
LINK/BTC has been pulling back since. The good news is that indicators are showing that the market targets to retest support of 6,700 satoshis. LINK/BTC is currently trading inside a bullish flag as it consolidates gains. The apex appears to be forming at the breakout. In addition, the 21-day, 100-day, and 200-day moving averages (MAs) are crawling around these levels. These MAs will be instrumental in keeping the support intact.
The strategy is to buy the dip as close to 6,700 satoshis as possible. As long as bulls preserve this support, they are likely to spur a rally to our targets of 10,000 satoshis first and then 12,000 satoshis.
The process may take more than a month.
4-Hour Chart of Chainlink/Bitcoin on Binance
As of this writing, the Chainlink/Bitcoin pair is trading at 7,841 satoshis on Binance.
Summary of Strategy
Buy: As close to 6,700 satoshis as possible.
Target: 10,000 first and then 12,000 satoshis.
Stop: 6,300 satoshis.
NOTE: a satoshi is the smallest unit of Bitcoin, which equals to 0.00000001 BTC.
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.