Trade Recommendation: Loom Network

Loom Network

Loom Network (LOOM/BTC) is a market that’s still trapped in range accumulation. Late last year, our trade recommendation to play the range worked well. The article pointed out to consider buying the bottom and selling the top end of the range which was close to 0.00002 and the plan worked.

Unfortunately, Loom Network deeply corrected and breached support of 0.0000107 on May 7, 2019. This drove the cryptocurrency to new lows of 0.00000696 on May 13th. The good news is that the market is showing signs of recovery. We may have a solid opportunity to enter long positions of the cryptocurrency at a good price point.

Technical analysis shows that LOOM/BTC is eyeing to recover our 2018 range bottom of 0.0000107. We believe that the market is still range trading between 0.0000107 and 0.00002. The move below the range low of 0.0000107 can be considered as a deviation. Technical indicators support this bias.

First, we see the daily RSI take out resistance of 46. This triggered the breakout from an inverse head-and-shoulders pattern. In addition, the market registered a significant volume uptick on June 8th. This is an indication that buyers are returning. Bottom-pickers may be sensing that Loom Network is about to recover 2018 lows.

The strategy is to buy on the retest of 0.0000107 as support. As long as the market reclaims this price area, we expect bulls to push the price to our initial target of 0.00001535.

The process may take a month.

Daily Chart of Loom Network/Bitcoin on Binance

Loom Network crypto chart
As of this writing, the Loom Network/Bitcoin pair is trading at 0.00001061 on Binance.

Summary of Strategy

Buy: Retest of 0.0000107 as support.
Target: 0.00001535
Stop: 0.0000101

 

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.