Trade Recommendation: Loopring
The price action of Loopring (LRC/BTC) over the last few weeks has given us reason to believe that the market is ripe for a bounce. On December 24, 2018, bulls tried to take out our range midpoint of 0.000012. Unfortunately, the rally was met by stiff resistance from bears. As a result, Loopring has been pulling back since.
The good news is that Loopring is very close to the bottom end of our range. That’s where we’ll try to bottom pick the market.
Technical analysis shows that LRC/BTC is on its way to support of 0.00001. We believe that this support will hold for the following reasons.
First, 0.00001 is a key weekly support. Bulls have defended this level since September 2017. If the market somehow breaches this level, participants have always managed to push the price up to 0.00001 before the weekly candle close. This tells us that bulls will likely defend this support again.
Also, the weekly and the 3-day RSI’s are in near oversold territories. On top of that, we can see a bullish divergence on the 3-day RSI. These signals tell us two things. First, bears appear exhausted on the longer time frame. Second, bulls are beginning to gather some momentum.
The combination of bear exhaustion and increasing bullish momentum while trading at a key support level has worked very well for us in the past. These are the reasons why it is worth considering this trade.
The strategy is to buy as close to 0.00001 as possible. As long as bulls keep the market above this level, they will likely attract more bottom pickers and bargain hunters. This might ignite a rally to our target of 0.000012. Take that out and 0.000014 is next.
The process may take less than a month.
3-Day Chart of Loopring/Bitcoin on Binance
As of this writing, the Loopring/Bitcoin pair is trading at 0.00001032 on Binance.
Summary of Strategy
Buy: As close to 0.00001 as possible.
Targets: 0.000012 and 0.000014.
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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