Trade Recommendation: Ethereum (ETH)
Ethereum (ETH/USD) has corrected by close to 50 percent from the 2019 high of $363.30 which was posted in June. The strength of the pullback may have placed any other type of asset in bear territory. However, this does not necessarily apply in cryptocurrencies. Keep in mind, Ethereum has climbed by over 337% from the crypto winter bottom of $83 in December 2018 to the 2019 high price. Thus, the significant correction is warranted.
Nevertheless, the cryptocurrency is still in a long-term uptrend. At this point, it is ripe for bottom picking.
Technical analysis shows that ETH/USD is respecting support of $195. This is crucial because $195 is an important support for the market. During the crypto winter of 2018, bulls protected this level from September to November. Now that bulls have reclaimed this price area, we believe that they’ll gladly defend it once again.
So far, our bias is being validated. The price immediately bounced when it hit the weekly support on July 16th. As a result, this week’s candle has a long wick below its body to indicate the presence of buyers.
In addition, bulls are working hard to defend RSI support of 50. If they maintain this level, we expect a solid bounce in the coming days.
The strategy is to buy on dips as close to $195 as possible. As long as ETH/USD trades above this level, it will likely rally to our initial target of $250. Take that out and $365 is next.
The process may take less than a month.
Daily Chart of Ethereum/US Dollar on Bitfinex
Summary of Strategy
Buy: As close to $195 as possible.
Targets: $250 and 365.
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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