Trade Recommendation: Loopring
The Loopring/Bitcoin (LRC/BTC) pair bounced off lows of 1,266 satoshis on September 12, 2018. At that price, the market was down by over 93% from the 2018 peak of 18,700 satoshis. Such heavy losses would have eliminated most, if not all, retail traders in the market. This allows the smart money to enter the market and buy positions at bargain prices.
Their buying activity did not go undetected. As LRC/BTC bottomed out, you can spot numerous volume upticks on the daily chart. Volume surged on September 22, October 2, October 24, and November 1. These are all indications that the smart money is buying in bulk. When they’re done, they will pump the market. That’s what we’re counting on.
Technical analysis shows that LRC/BTC is positioned to take out resistance of 1,825 satoshis. Breach of this resistance would trigger the breakout from the inverse head and shoulders pattern on the 4H chart. This would launch the market’s bull run.
In addition, technical indicators are looking really good. The RSI is far from overbought territory. More importantly, the 100-day and 200-day moving averages (MA) are moving below the candles. These MAs will act as strong support levels and help the market start its uptrend.
The strategy is to buy the breakout at 1,825 satoshis as long as LRC/BTC prints volume of 10 million Loopring units. Those who bought the bottom might take profits at the resistance. The market needs buyers to absorb the selling pressure.
Once the breakout is complete, we expect LRC/BTC to climb to our target of 3,470 satoshis. The process may take a month.
Daily Chart of Loopring/Bitcoin on Binance
As of this writing, the Loopring/Bitcoin pair is trading at 1,812 satoshis on Binance.
Summary of Strategy
Buy: Breakout at 1,825 satoshis after volume of 10 million Loopring units.
Target: 3,470 satoshis
Stop: 1,760 satoshis
NOTE: a satoshi is the smallest unit of Bitcoin, which equals to 0.00000001 BTC.
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.