Trade Recommendation: FunFair

FunFair (FUN/USD) is a market that has recently escaped range accumulation. From November 2018 to April 2019, the cryptocurrency range traded between $0.0035 and $0.0058. Over the last few weeks, the market has given us multiple bullish signals. This is the reason why we’re interested in this cryptocurrency.

Technical analysis shows that FUN/USD has taken out range high of $0.0058 on April 8, 2019. The move above the resistance triggered the breakout from a triple bottom reversal pattern on the daily chart. In addition, the breakout also sparked a rally to as high as $0.0073 on the same day.

At that point, FunFair was showing signs of short-term bullish exhaustion. The daily candle had a long wick on top of its body. Moreover, the market was already trading in overbought conditions. These signals indicated that the cryptocurrency was overheated. Thus, the retrace below $0.0058 on April 10th was not surprising.

For about a month, bears tried their best to drive the market down to range low of $0.0035. The bulls, however, held firm and kept FunFair trading close to $0.0058 until May 15th when they pushed the market above the range resistance again. Since then, the bulls have worked hard to keep the cryptocurrency above $0.0058.

The strategy is to buy on dips as close to $0.0058 as possible. We believe that this support will hold for two reasons. First, bulls have built a strong base around that level. Second, the 50-day moving average (MA), 100-day MA, and 200-day MA are all crawling around that level. They will act as additional supports that will keep the market from trading lower.

As long as bulls are above $0.0058, they will likely generate a rally to our target $0.0088.

The process may take a month.

Daily Chart of FunFair/US Dollar on Bitfinex

FunFair chart
As of this writing, the FunFair/US Dollar pair is trading at $0.006188 on Bitfinex.

Summary of Strategy

Buy: As close to $0.0058 as possible.
Target: $0.0088
Stop: $0.0052

 

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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.