Trade Recommendation: Qtum/Ethereum
The Qtum/Ethereum (QTUM/ETH) pair is down by over 76% year-to-date. Bears started to take control of the market on the first day of 2018. They’ve held on to it as much as they could, but no more. Bears are exhausted and bulls are taking notice.
Technical analysis show that Qtum/Ethereum has breached resistance of 0.016. This enabled the pair to break out of the large falling wedge on the daily and weekly charts. If you peek at the 2-hour chart, you would also see a breakout from a large inverse head and shoulders pattern at 0.016.
The breakout looks convincing because there was follow through in terms of price and volume. On August 28, the pair generated volume that’s over 178% of its daily average. In addition, the market has managed to stay above 0.0155 for about three days now. The longer the market stays above the former resistance, the more attention it gets.
Also, a look at the RSI shows the extent of the bear exhaustion. Bears had very little left in the tank since June 24 but they kept pushing. They were able to drive prices down but eventually, bulls took notice and momentum surged.
The strategy is to buy the backtest of the breakout as close to 0.016 as possible. Those who bought the bottom at 0.013953 are now taking profits. This may be an opportunity for you to buy the dip.
The successful backtesting of the breakout will likely generate the momentum needed to take the market to our target of 0.0238. The process may take a month.
Daily Chart of Qtum/Ethereum on Binance
As of this writing, the Qtum/Ethereum pair is trading at 0.016262 on Binance.
Summary of Strategy
Buy: Backtest of breakout as close to 0.016 as possible.
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.