Trade Recommendation: Maker
Maker (MKR/BTC) is a market that has been beaten to a pulp. The cryptocurrency plummeted to as low as 0.055 on June 27, 2019. At that point, it lost over 71% of its value from this year’s high of 0.1906 which was posted on February 26th.
Nevertheless, such a heavy loss in a relatively short period of time has driven the pair to extreme oversold conditions. There are also other signals telling us that the market has bottomed out, at least in the short-term. These signs are the reasons why we’re considering Maker.
Technical analysis shows that MKR/BTC is carving a bottom at support of 0.055. We have this view for several reasons.
Aside from extreme oversold conditions, the market is also flashing a bullish divergence on the daily RSI. This indicates that bulls are gathering significant momentum despite the falling prices. Also, there was a significant volume uptick on June 26th. The sudden volume surge is a strong capitulation signal.
More importantly, 0.055 is Maker’s historic support on Bitfinex. The market has kept this demand area intact since September 2018. With technical indicators flashing bearish exhaustion, a dead-cat bounce is in order at the very least.
The strategy is to buy as close to 0.055 as possible. Consider only playing the bounce and be quick to take profits. The market has yet to print a technical reversal signal.
As long as bulls keep MKR/BTC above 0.055, we can expect a bounce to 0.0733. Take that out and 0.0937 is our next target.
The process may take less than a month.
Daily Chart of Maker/Bitcoin on Bitfinex
Summary of Strategy
Buy: As close to 0.055 as possible.
Targets: 0.0733 and 0.0937.
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.