Trade Recommendation: Digibyte
Digibyte (DGB/BTC) may be down big last year but it looks like it wants to start 2019 with a bang. In 2018, the market dropped to as low as 0.00000225 in March and 0.00000232 on December 10, 2018. At that latter price, Digibyte lost more than 72% of its value from the 2018 peak of 0.0000083. Although the market may seem hopeless, it is actually in a place where the risk to reward ratio is very favorable.
Technical analysis shows that DGB/BTC may be headed to key support of 0.00000225. This view comes after the market broke below support of 0.00000294 December 5 and flipped it into a resistance on December 6.
On December 18, Digibyte tried to take out that level but higher prices were firmly rejected. This affirms our view that DGB/BTC may touch 0.00000225 before any meaningful bounce.
Also, 0.00000225 is a strong weekly support area. The market immediately rejected lower prices in March 2018 when it wicked down to this support. This led to a strong bounce to 0.00000684 in July 2018.
In addition, the 200 moving average is crawling just below 0.00000225. It is now acting as a strong magnet that attracts the price down. However, it will likely serve as strong support once DGB/BTC is trading around that area. This is what happened to many altcoins, including Bitcoin (BTC/USD).
The strategy is to buy on dips as close to 0.00000225 as possible. As long as bulls stay above this level, Digibyte will likely rally to our target of 0.00000294. Take that out and 0.00000364 is next.
The process may take more than a month.
Weekly Chart of Digibyte/Bitcoin on Poloniex
As of this writing, the Digibyte/Bitcoin pair is trading at 0.00000275 on Poloniex.
Summary of Strategy
Buy: As close to 0.00000225 as possible.
Targets: 0.00000294 and 0.00000364.
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.