Trade Recommendation: OmiseGo/Ethereum
The OmiseGo/Ethereum (OMG/ETH) pair lost about 45% of its value this year as it reached a low of 0.0148 on July 12. This sharp decline may give the impression that the market is extremely bearish. However, we believe that the pair is in sideways consolidation and we have the technicals to prove it.
Technical analysis show that OmiseGo/Ethereum is locked in a wide range between 0.015 and 0.03. This trend started in October 2017 when the pair established resistance at 0.03. Since then, bulls take over when OMG/ETH falls to 0.015 while bears take the market back when it rallies to 0.03. The recent drop to 0.015 presents an opportunity to once again trade the range.
Furthermore, we are confident that the market will bounce again because technical indicators are flashing reversal signals. First, the RSI has managed to turn its resistance into support while showing a bullish divergence. In addition, a bullish divergence can also be spotted on the daily MACD.
The strategy is to buy as close to 0.015 support as possible. If bulls preserve the support, a move to the top end of the range becomes very likely. The initial target is 0.02. Take that out and the market has an easier path to 0.03, but that may take some time.
The process may take more than a month.
Daily Chart of OmiseGo/Ethereum on Bitfinex
As of this writing, the OMG/ETH pair is trading at 0.015432 on Bitfinex.
Summary of Strategy
Buy: As close to 0.015 as possible.
Target: 0.02 first and then 0.03.
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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