Trade Recommendation: Stellar

The Stellar/Bitcoin (STR/BTC) pair kicked its bull run into overdrive on January 1, 2018 when it breached resistance of 0.00003. The breakout attracted momentum players, which drove the price up to as high as 0.00006199 on January 3. The 106.63% growth in two days was enough for breakout players to take profits.

As the market succumbed to selling pressure, it went as low as 0.00003125 on January 16. Bulls rushed in to buy positions as the pair was close to its breakout point of 0.00003. This triggered a rally that sent the market to as high as 0.00005830 on January 26. However, the rapid rise in value pushed bottom pickers to sell their positions. Consequently, the market’s value declined, and this provides an opening to buy the dip.

Technical analysis show that the market is creating a bullish continuation pattern in the weekly chart. Currently, the pair is locked in a range between 0.00004 and 0.00006 while it consolidates. This period is necessary to get the market out of overbought territory. Eventually, sellers will run out of positions, and that could ignite a massive rally.

The strategy is to buy as close to 0.00004 support as possible. Once consolidation is over, the market will likely march to our target of 0.00008. The process may take about a month.

Weekly Chart of Stellar/Bitcoin on Poloniex

As of this writing, the Stellar/Bitcoin pair is trading at 0.00004180 on Poloniex.

 

 

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.