Trade Recommendation: Maker

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

Maker crypto chart
As of this writing, the Maker/Bitcoin pair is trading at 0.05782 on Bitfinex.

Summary of Strategy

Buy: As close to 0.055 as possible.
Targets: 0.0733 and 0.0937.
Stop: 0.053

 

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.