Trade Recommendation: Loom Network

The Loom Network/Bitcoin pair (LOOM/BTC) dropped to as low as 0.00001001 on August 14, 2018. At that price, the market lost almost 88% of its value from the 2018 peak of 0.00008199.

Like we’ve seen in many altcoin cases, LOOM/BTC started to bottom out after suffering tremendous losses. This process is always difficult to time, especially if the market has a price history of fewer than six months. However, we can always rely on reversal structures to see if the bottom is already in place. We’re seeing LOOM/BTC mark its bottom as well as end its downtrend using a reliable reversal pattern.

Technical analysis shows that LOOM/BTC has taken out resistance of 0.000019 on October 10, 2018. This triggered the breakout from the double bottom structure on the daily chart. The pattern tells us that the support area of 0.00001 has been created and has completed the retest. The creation of this support attracted bargain hunters and bottom fishers. This generated the momentum needed to breach resistance of 0.000019.

The breakout looks convincing as well. On the day of the breakout, LOOM/BTC generated volume that’s over 428% of its daily average. This suggests that the fear of missing out is creeping in. Participants are buying at a higher price in massive numbers. This is the state of mind that ignites powerful bull runs. 

The strategy is to buy on dips as close to 0.000018 as possible. The market is still close to overbought territory, which tells us that it may go below the breakout. As long as LOOM/BTC stays above 0.000018, it has the momentum to rally to our target of 0.000028.

The process may take more than a month.

Daily Chart of Loom Network/Bitcoin on Binance

As of this writing, the Loom Network/Bitcoin pair is trading at 0.00001962 on Binance.

Summary of Strategy

Buy: On dips as close to 0.000018 as possible.

Target: 0.000028

Stop: 0.0000175

 

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.