Trade Recommendation: POA Network

POA Network (POA/BTC) breached key monthly support of 0.00000942 on November 20, 2018. At that point, the market appeared ready to print a fresh yearly low. However, bulls rejected lower prices as they rallied to close the day at 0.00000929. While the daily close was still below the monthly support, the daily chart generated a hammer candle. This encouraged more bargain hunters and bottom pickers to enter the market.

With the increased buying activity, POA/BTC rallied to as high as 0.00001216 on November 28. At that price level, participants who had a short-term trading horizon took the opportunity to lock in gains. As a result, the market retreated. Nevertheless, this pullback can be a good chance to buy the monthly support.

Technical analysis shows that POA/BTC appears to be range trading between 0.00000942 and 0.000016. The range has been further solidified by recent price action. The breach of 0.00000942 looks like a good old-fashioned shakeout. POA Network quickly recovered the support and now appears to be retesting it. So far, it appears that the support will hold.

The strategy is to set bids lower than the monthly support. Buy as close to 0.00000895 as possible. With this strategy, we avoid stop hunts or market maker liquidations.

As long as the market does not significantly deviate from 0.00000942, POA/BTC will likely be fine. More importantly, POA/BTC would have formed a triple bottom pattern. This will probably ignite a rally to the top end of the range of 0.000016.

The process may take more than a month.

Daily Chart of POA Network/Bitcoin on Binance

As of this writing, the POA Network/Bitcoin pair is trading at 0.00000948 on Binance.

Summary of Strategy

Buy: As close to 0.00000895 as possible.

Target: 0.000016

Stop: 0.00000873


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.