Trade Recommendation: Decred
The Decred/Bitcoin (DCR/BTC) market went in a downtrend on July 16, 2017 when it broke support of 0.01. This triggered a bearish head and shoulders reversal pattern. While the market did bounce on July 29 to reach 0.01325, it closed below 0.01 the next day. Bulls tried to defend the support level, but selling pressure was too strong. The market went below 0.01 on August 4, and since then, it has never closed above that level again.
With increased selling activity, the market generated a series of lower highs and lower lows. The pair continued to plunge until it bottomed out at 0.00279756 on December 7. At that price level, the market lost over 72% of its value after breaking 0.01 support. Bottom pickers exploited the drop, and pushed the market to as high as 0.00987776 on January 31, 2018. While the market has corrected since then, it presents you an opportunity to place buy orders cheap.
Technical analysis show that the Decred/Bitcoin market has achieved the target of the head and shoulders pattern when it went below 0.003. More importantly, the pair appears to be creating a bullish higher low setup at 0.007. If bulls get to defend this level, they can use it to launch a rally.
The strategy is to buy as close to 0.007 as possible. If the market respects 0.007, it will likely rally to our target of 0.01. The process may take less than a month.
Daily Chart of Decred/Bitcoin on Poloniex
As of this writing, the Decred/Bitcoin pair is trading at 0.00752342 on Poloniex.
Summary of Strategy
Buy: As close to 0.007 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.
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