Trade Recommendation: Verge
Verge (XVG/USD) is a market that has finally escaped accumulation. From November 2018 to the middle of May 2019, the cryptocurrency range traded between $0.0052 and $0.009. Recently, however, the market started to show signs of significant bullishness. This is the reason why we’re looking into Verge.
Technical analysis shows that XVG/USD has broken out of a large double bottom pattern on the daily chart. This happened when the market breached range high of $0.009 on May 15th. The breakout triggered a rally that saw the market climb to as high as $0.01349 on May 17th. More importantly, the breakout marks Verge’s trend reversal on the shorter timeframe.
At that point, the market was showing signs of short-term bullish exhaustion. The candle on May 17th had a long wick on top of its body to indicate the presence of sellers. On top of that, the market was trading in overbought territory. With these signals, the market corrected.
Nevertheless, bulls were able to hold their ground at $0.009. This is what makes Verge an interesting trade.
The strategy is to buy on dips as close to $0.009 as possible. We’re confident that Verge will stay above this support because the 50-day moving average (MA) is crawling around that level. In addition, our MAs are aligned in a bullish manner. The 50-day MA is on top of the 100-day MA and the 100-day MA is above the 200-day MA. This formation tells us that the market’s uptrend is healthy.
If bulls can stay above $0.009, they will likely generate a rally to our target $0.0135.
The process may take a month.
Daily Chart of Verge/US Dollar on Bitfinex
Summary of Strategy
Buy: As close to $0.009 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.