Trade Recommendation: Omni

The Omni/Bitcoin pair exhausted its bull run on July 6, 2017 when it generated a lower high at 0.0253. The downtrend was confirmed when the market broke support at 0.02 on July 11, which triggered a bearish head and shoulders reversal pattern. It then created a series of lower lows and lower highs until it found the bottom at 0.00241466 on November 2. The market lost 87.93% of its value within four months after reversing its trend.

However, it quickly established firm support at 0.0025 after bottoming out. It consolidated at that support level for a month until it broke resistance at 0.0045 on December 21. The market managed to go as high as 0.0087 before breakout players and bottom pickers stepped in to take profits. The pair retreated, but it provided a window of opportunity for you to buy cheap.

Technical analysis show that the market is creating a bullish higher low set up at 0.0045. The important thing to note is the astronomical surge in volume on January 27. The daily average of bitcoin volume for this market was around 20 BTCs, but on January 27, the volume skyrocketed to 676.16 BTCs. This is an encouraging sign because that means more participants are holding positions around 0.0045.

The strategy is to buy as close to 0.0045 as possible. Should bulls defend this level, the market will attempt to breach resistance at 0.009 in one month.

Weekly Chart of Omni/Bitcoin on Poloniex

As of this writing, the Omni/Bitcoin pair is trading at 0.00469721 on Poloniex.



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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.