Trade Recommendation: Modum/Ethereum
The Modum/Ethereum pair (MOD/ETH) flashed signs of bullishness when it breached resistance of 0.006 on December 30, 2017. The momentum of the breakout was so strong that it went as high as 0.0133 on the same day. At this price level, the market was in extreme overbought territory. Having grown by over 120% in 24 hours, breakout players took profits.
Faced with selling pressure, MOD/ETH nosedived to 0.005842 on January 6, 2018. Bottom pickers sensed that a higher low was in place so they bought the dip. While the market did bounce, it generated a lower high of 0.01199 on January 8. The bearish setup sent the market spiralling down. It created a series of lower highs and lower lows until recent events.
Technical analysis show that Modum/Ethereum appears to be bottoming out at 0.003 support. On February 25, the market went as low as 0.003087, but bottom pickers bought positions. This contributed to volume of over 300,000 modum units, whereas the daily average was about 116,000. Since then, volume has been declining, which may suggest that sellers are losing interest to sell at this price level.
The strategy is to buy as close to 0.003 support as possible. If bulls defend this territory, the market will likely consolidate at this level before climbing to our target of 0.006. The process may take more than a month.
Daily Chart of Modum/Ethereum on Binance
As of this writing, the Modum/Ethereum pair is trading at 0.003043 on Binance.
Summary of Strategy
Buy: As close to 0.003 as possible.
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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