Trade Recommendation: Ethereum
To say that Ethereum (ETH/BTC) is having a nightmarish 2018 would be an understatement. The market plummeted to as low as 0.02463 on December 7, 2018. At that price level, the market was down by over 80% from its 2018 high of 0.123799.
The good news is that Ethereum is flashing signs of recovery in the shorter time frames amidst bearish exhaustion on the longer time frames. This is a combination that we often observe in a market that’s forming a short-term bottom.
Technical analysis shows that ETH/BTC has managed to recover critical support of 0.026746. To understand the importance of this level, we have to look a year back. In December 2017, Ethereum dropped to this level but lower prices were rejected. The failed swing low was instrumental in the market’s parabolic run to 0.123799.
Now, Ethereum breached the support early this month to print a 2018 low of 0.02463. However, bulls fought back to reclaim the parabolic support. With the recovery, the breach can be interpreted as a bear trap. Additionally, the oversold signals and bullish divergence on the weekly RSI point to the conditions required for a strong rally.
The strategy is to buy as close to 0.026746 as possible. As long as the market stays above this level, ETH/BTC will likely generate the momentum to rally to our initial target of 0.03157. Take that out and 0.036388 is next.
The process may take less than a month.
Weekly Chart of Ethereum/Bitcoin on Binance
As of this writing, the Ethereum/Bitcoin pair is trading at 0.026905 on Binance.
Summary of Strategy
Buy: As close to 0.026746 as possible.
Targets: 0.03157 and 0.036388.
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.