Trade Recommendation: NEM
The NEM/Bitcoin pair (XEM/BTC) came off lows of 0.00001257 on September 12, 2018. At that price level, the XEM/BTC pair was down by over 90% from the 2018 high of 0.000137. To add insult to injury, many altcoins have already managed to reverse their trend yet the pair is still correcting. Thus, NEM/Bitcoin appears to be one of the worst performers in 2018 as well as a laggard.
Though a laggard altcoin pair sounds undesirable, this actually presents an opportunity. Laggards often follow the overall trend eventually. That means we can leverage similar setups used by altcoin leaders, such as Ripple (XRP/USD) and Monero (XMR/USD), to generate a profitable trade.
Technical analysis show that XEM/BTC started to gather bullish momentum when it dropped to parabolic support of 0.000013 on September 12. The increased demand at this level put the pair in the position to take out resistance of 0.000015. A breach would enable the market to break out from the falling wedge on the daily chart. Take note: this is the exact the same script followed by Ripple and Monero to reverse their trend.
The strategy is to buy the breakout at 0.000015 after the market generates volume of at least 7 million NEM units. Those who bought the bottom might take profits at the resistance. The market needs buyers to absorb the selling pressure.
Once breakout is complete, the market will likely generate a rally to our target of 0.0000215. The process may take less than a month.
Daily Chart of NEM/Bitcoin on Poloniex
As of this writing, the NEM/Bitcoin pair is trading at 0.00001418 on Poloniex.
Summary of Strategy
Buy: Breakout at 0.000015 after the market prints volume of 7 million NEM units.
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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