Trade Recommendation: Stellar
The Stellar/Bitcoin pair (STR/BTC or XLM/BTC) ignited a bull run on January 1, 2018 when it breached 0.000028 resistance. This triggered the rounding bottom reversal pattern on the daily chart. The breakout prompted the market to go parabolic as it went as high as 0.00006199 on January 3. In two days, STR/BTC skyrocketed by over 121%.
Breakout traders and trend followers started to take profits once the target of the pattern was achieved. The selling pressure drove the pair down to 0.00003125 on January 16. Bottom pickers then bought the dip. This sparked a rally that lifted the market to 0.0000583 on January 26.
With a lower high in sight, the market became increasingly bearish. It broke the 0.000045 support on February 15. From there, it plummeted until it found the bottom at 0.0000213 on March 18. Fortunately for bottom fishers, STR/BTC has been rallying since. It even managed to resume its uptrend.
Technical analysis show that Stellar/Bitcoin has taken out resistance of 0.000045 on April 28. This triggered the inverse head and shoulders pattern on the daily chart. The breakout was validated by a follow through that saw the market climb to 0.00005009 on April 29. However, the pair is in overbought territory. The expected dip can be your opportunity to buy near the breakout point.
The strategy is to buy dips as close to 0.000045 as possible. If bulls keep the market above this level, they will create a base for some time before moving to our target of 0.000062.
The process may take a month.
Daily Chart of STR/BTC on Poloniex
As of this writing, the Stellar/Bitcoin pair is trading at 0.00004717 on Poloniex.
Summary of Strategy
Buy: Buy on dips as close to 0.000045 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.
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