Trade Recommendation: Monero
We’ve been keeping an eye on Monero (XMR/BTC) for weeks now. It has lost so much value this year that it is now trading at a level where it would make sense for the smart money to scale in. So far, it appears that they’re affirming this assumption.
Technical analysis shows that XMR/BTC has established a short-term bottom at 0.0117. This view comes after the market respected the 200 MA on the weekly chart. To understand the importance of this price action, just look at how Bitcoin (BTC/USD) reacted after touching the 200 MA on the weekly. It rallied by over 36% in less than two weeks. We’re expecting a similar reaction from Monero.
On top of that, Monero just broke out of an inverse head and shoulders pattern on the 4H chart. This tells us that the market is bullish in the short-term. Also, the weekly RSI appears to bounce after flashing oversold signals. This is another indication that a relief rally, at the very least, is on the horizon.
At this point, we have a confluence of three events that support our short-term bullish view. We have the 200 MA on the weekly acting as support, the inverse head and shoulders reversal on the shorter timeframe, and the near oversold signals on the weekly RSI. These are strong reasons to take on this trade.
The strategy is to buy on dips as close to 0.0128 as possible. As long as bulls stay above this level, Monero will likely rally to our target of 0.01575. We’ll revisit this trade after the target is hit.
The process may take less than a month.
Weekly Chart of Monero/Bitcoin on Poloniex
As of this writing, the Monero/Bitcoin pair is trading at 0.01316517 on Poloniex.
Summary of Strategy
Buy: As close to 0.0128 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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