Trade Recommendation: Populous

The Populous/Bitcoin (PPT/BTC) pair launched its uptrend on January 7, 2018 when it took out resistance of 0.0032. This triggered the cup and handle reversal pattern on the daily chart. The breakout attracted so much momentum that the pair quickly became parabolic. With its supercharged velocity, PPT/BTC skyrocketed to 0.007901 on January 31. In less than a month, the market rose by almost 147%.

At this price point, the pair was in extreme overbought territory. Those who bought the breakout took the opportunity to lock in gains. This ignited a massive selling frenzy that drove the pair down to 0.0015159 on March 9.

The higher the climb, the greater the fall. This is what often happens to any asset that goes parabolic.

Fortunately for bottom pickers, PPT/BTC rallied to slightly over 0.0032 resistance on April 17. While the market has been pulling back since, it appears that bulls are beginning to make their presence felt.

Technical analysis reveals that Populous/Bitcoin is carving a bullish higher low setup at 0.0017. Volume began to spike on May 15 when the pair hovered above this level and it remained elevated for the next seven days. This tells us that bulls are ready to buy positions at higher price point. More importantly, PPT/BTC managed to stay above 0.0017 even in the midst of intense selling pressure.

The strategy is to bottom fish the market and buy as close to 0.0017 as possible. As long as the market stays above the support, bulls have all the momentum they need to climb to our target of 0.0032.

The process may take a month.

Daily Chart of Populous/Bitcoin on Binance

As of this writing, the Populous/Bitcoin pair is trading at 0.0018697 on Binance.

Summary of Strategy

Buy: As close to 0.0017 as possible.

Target: 0.0032

Stop:  0.00165

 

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, InvestorAcademy.org 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.