Trade Recommendation: Quantstamp

The Quantstamp/Bitcoin pair (QSP/BTC) came off lows of 389 satoshis on September 12, 2018. At this price, the market has lost over 92% of its value from its 2018 peak of 5,420 satoshis. Again, with this type of loss, the smart money enters and accumulates positions at the cheapest possible price level. We’ve seen this in many altcoins that have recently pumped.

With the smart money’s buying activities, QSP/BTC rallied to as high as 818 satoshis on October 15. Those who bought the bottom exploited the rally as they took profits on extreme overbought signals on the 4-hour RSI. The market has been pulling back since. Nevertheless, it presents us an opportunity to buy the dip.

Technical analysis shows that QSP/BTC is flipping 600 satoshis resistance into support. This level appears to be the midpoint of the market’s range. If you look closely, QSP/BTC has been trading between 400 satoshis and 800 satoshis for over 90 days. Therefore, bulls have a better chance of breaking out of this range once they establish 600 satoshis as a firm support. Looks like they will.

We’re confident that the new support will hold for a couple of reasons. First, we can see that the 200-day moving average is about to touch the candle. Thus, we can expect it to act as a support that will most likely ignite a strong bounce.

Another thing working in favor of the bulls is that the market is in oversold territory. This can spark a rally as the expected selling relief might constrict supply. If supply is limited at a high demand area, then QSP/BTC can suddenly turn bullish.

The strategy is to buy the dip as close to 600 satoshis as possible. As long as bulls hold this support, they are likely to inspire a rally to our targets of 800 satoshis first and then 1,000 satoshis.

The process may take more than a month.

4-Hour Chart of Quantstamp/Bitcoin on Binance

As of this writing, the Quantstamp/Bitcoin pair is trading at 635 satoshis on Binance.

Summary of Strategy

Buy: As close to 600 satoshis as possible.

Target: 800 first and then 1,000 satoshis.

Stop: 570 satoshis.

 

NOTE: a satoshi is the smallest unit of Bitcoin, which equals to 0.00000001 BTC.

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.