Trade Recommendation: POWR/BTC

The Power Ledger/Bitcoin pair (POWR/BTC) bottomed out on March 18 at 0.000036 (A-wave). At this price level, the market was already flashing signs of reversal. First is the bullish divergence that can be spotted on the RSI. Second is the hammer candlestick on the daily chart that suggests the presence of buyers below 0.0000395.

Bottom pickers who saw these signs entered the market. Their buying activity inspired a B-wave rally to 0.00006969 on April 24. Unfortunately for buyers at this level, 0.00006 is the 50% Fibonacci level and a firm resistance. This is where bottom fishers took profits, which sent the pair down to 0.00004344 on May 11 (C-wave).

When participants saw that the pair respected the 38.2% Fibonacci level, it ignited a D-wave rally that propelled POWR/BTC to 0.00006521 on May 16. Again, bears defended the 50% Fibonacci level but the price movement is telling us that their days may be numbered.

Technical analysis show that POWR/BTC is preparing to take out resistance of 0.00006. This would trigger the ascending triangle pattern on the daily chart. Instead of buying at the breakout point, you could minimize risk while maximizing your profits if you buy at the next possible higher low.

The strategy is to bottom pick the market and buy as close to 0.0000486 as possible. This price point appears to be the new higher low or the tail end of the E-wave. As long as the market stays above this level, bulls have all the momentum they need to take out 0.00006 and move to our target of 0.00008.

The process can take less than a month.

Daily Chart of POWR/BTC on Binance

As of this writing, the Power Ledger/Bitcoin pair is trading at 0.000488 on Binance.

Summary of Strategy

Buy: As close to 0.0000486 as possible.

Target: 0.00008

Stop: 0.0000466

 

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.