Trade Recommendation: Komodo
The Komodo/Bitcoin pair (KMD/BTC) bounced off lows of 0.0001435 on September 12, 2018. At that price, the market shed over 88% from the 2018 high of 0.0012598. But just like many altcoins that we’ve recently covered, KMD/BTC started to show signs of stability as soon as it touched a key support area. This is one of the reasons why we believe the market will turn bullish soon.
Technical analysis shows that KMD/BTC is poised to take out the downtrend resistance of 0.000175. This would trigger the breakout from the large falling wedge on the daily chart.
We have this view because bulls appear intent on defending historic support of 0.00016. Volume surged by over 319% on August 3 and as much as 142% on September 20 when the market touched this price level.
In addition, we can see the daily RSI print a large bullish divergence on the daily chart. This signals a possible trend reversal as momentum starts to favor the bulls. Even though the price continues to fall, the growing bullish momentum will make it very difficult for bears to maintain market control.
The strategy is to buy the breakout at 0.000175 after the market generates volume of 1 million Komodo units. Bears look like they are not yet ready to give up even if they face exhaustion. Additionally, those who bought the bottom might take some profits when the market rallies. KMD/BTC needs buyers to take on the selling pressure.
Once breakout is complete, the market will likely generate a rally to our target of 0.00028. The process may take a month.
Daily Chart of Komodo/Bitcoin on Binance
As of this writing, the Komodo/Bitcoin pair is trading at 0.0001689 on Binance.
Summary of Strategy
Buy: Breakout at 0.000175 after the market prints volume of 1 million Komodo units.
Stop: 0.00016 after the breakout.
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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