Trade Recommendation: OmiseGo
OmiseGo (OMG/USD) is a market that’s trying to carve a bottom. This bottoming out process began when OmiseGo dropped to $1.0898 on December 15, 2018. At that point, the market may look like it was struggling to find its footing. In reality, it was actually relying on a support that has existed since July 2017.
This was the level where the smart money accumulated positions before launching a bull run that saw the market climb as high as $13.70 on September 12, 2017. Thus, it is not at all surprising to see OmiseGo back at $1.09 over one and a half year later.
Technical analysis shows that OMG/USD is in sideways consolidation. This view comes after the market once again respected the range low of $1.09. With this price action, OmiseGo is now forming a double bottom pattern on the the 4H chart. While this structure might be enough to be the foundation of the market’s next bull run, for now, we’ll settle with the idea that the market has established a durable bottom. This should be enough to generate significant profits.
In addition, we believe $1.09 will hold because bulls have already shown their hand. You will notice that OMG/USD broke this support temporarily on February 1, 2019. However, bulls immediately scooped positions to reclaim the support. Lastly, we can see a bullish divergence on the 4H chart. This is an indication that OmiseGo is turning bullish.
The strategy is to buy as close to $1.09 as possible. As long as OMG/USD trades above this level, it will likely rally to our range midpoint of $1.51. Take that out and the next target is $1.93.
The process may take less than a month.
Daily Chart of OmiseGo/US Dollar on Bitfinex
As of this writing, the OmiseGo/US Dollar pair is trading at $1.0938 on Bitfinex.
Summary of Strategy
Buy: As close to $1.09 as possible.
Targets: $1.51 and 1.93.
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.