Trade Recommendation: Komodo
The Komodo/Bitcoin (KMD/BTC) pair has been trading bearishly since it failed to take out resistance of 0.0005 on April 14, 2018. This was a signal to market participants that the pair was not yet ready to launch a bull run. As a result, the pair generated lower highs and lower lows. It even broke the last line of support, which is 0.00018 on August 2. However, the price action appears to favor bulls.
Technical analysis show that the move below 0.00018 of KMD/BTC was a false breakout. The move looks like a bear trap as the market printed extremely high volume on August 3. The last time KMD/BTC registered such heavy volume was in May 2018.
On top of that, the heavy volume forced KMD/BTC to break out of a falling wedge pattern that has kept the market bearish for the last four months. The breakout is supported by a bullish divergence in the daily RSI.
The strategy is to buy the retest of 0.00018. Backtesting often happens after the market rallies from a false breakout. Use this opportunity to buy as close to the support as possible.
If the backtest is a success, then our initial target is 0.00032. The process may take a month.
Daily Chart of Komodo/Bitcoin on Binance
As of this writing, the Komodo/Bitcoin pair is trading at 0.0002128 on Binance.
Summary of Strategy
Buy: Backtest of 0.00018
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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