Trade Recommendation: DigixDAO/Ethereum
Based on its chart, it appears that the DigixDAO/Ethereum (DGD/ETH) pair went as high as 0.5 on its initial coin offering (ICO) on November 27, 2017. On the same day, however, the pair closed at 0.22133. The bearish action dictated the pair’s price movement for a couple of months until it bottomed out on January 16, 2018 at 0.13502.
It didn’t take the market long to rally after finding the bottom. It came back to life on February 2 when it opened at 0.2496 and went as high as 0.7. Bottom pickers exploited the market’s rapid ascent as they took profits. DGD/ETH pulled back and created a bullish higher low setup at 0.24711 on February 17. Bulls used the new support level to ignite the market’s first bull run.
Technical analysis reveal that DigixDAO/Ethereum has broken out of a cup and handle reversal pattern on February 27 when it breached resistance of 0.5. The move was validated when the market reached 0.7 on February 28 with heavy volume. Currently, the market is pulling back to resolve overbought readings. This is your chance to enter near a firm support level.
The strategy is to buy as close to 0.5 support as possible. This used to be a firm resistance so bulls will likely fight tooth and nail to defend this level. If the market respects 0.5, we have a target of 0.85. The process can take a month.
Daily Chart of DigixDAO/Ethereum on Binance
As of this writing, the DigixDAO/Ethereum pair is trading at 0.5856 on Binance.
Summary of Strategy
Buy: As close to 0.5 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.