Trade Recommendation: Tezos

Tezos

Tezos (XTZ/USD) is a market that’s in a strong uptrend. We have this view because the cryptocurrency took out resistance of $1.04 on April 14, 2019. This triggered the breakout from a large rounding bottom pattern on the daily chart. The breakout marked the technical reversal and the beginning of the market’s uptrend.

With Tezos in full control of the bulls, it rallied to as high as $1.8652. From that point, the cryptocurrency has corrected. This gives us a chance to buy the market at a steep discount.

Technical analysis shows that XTZ/USD is headed to support of $1.04. We have this view because bears have managed to control our current range midpoint of $1.44. Below that level, our range low of $1.04 becomes the logical bottom-picking target.

We believe this level will hold because, by the time Tezos drops to $1.04, the market will likely be in oversold territory. As sellers lose interest to dump positions, we expect buyers to return because Tezos has an attractive risk to reward ratio at $1.04. In addition, the 100-day moving average is crawling close to that level. It will act as an additional support level to keep prices from dropping lower.

The strategy is to buy on dips as close to $1.04 as possible. As long as bulls defend this level, they will likely gather the momentum to hit our targets $1.44 and $1.84.

The process may take a month.

Daily Chart of Tezos/US Dollar on Bitfinex

Tezos chart
As of this writing, the Tezos/US Dollar pair is trading at $1.2883 on Bitfinex.

Summary of Strategy

Buy: As close to $1.04 as possible.
Targets: $1.44 and $1.84
Stop: $0.99

 

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.