Trade Recommendation: WaBi

The WaBi/Bitcoin (WABI/BTC) pair managed to climb to as high as 0.00040733 on January 10, 2018. At this price level, the pair started to show signs of exhaustion. The daily RSI was in extreme overbought territory. In addition, the daily candle had a long wick on top of its body.

Apparently, those were the beginnings of a seven-month bear market. The deep retracement drove WABI/BTC to as low as 0.00001887 on August 14. The positive news is that bears are now the ones showing signs of exhaustion.

Technical analysis show that WABI/BTC has breached resistance of 0.000027 on August 26. The breakout triggered the large falling wedge on the daily chart. This pattern was responsible for keeping the market bearish for most of the year.

The breakout looks convincing because it was pushed by heavy demand. On August 26, WABI/BTC generated volume that’s over 360% of its daily average. On top of that, the daily RSI also broke out from its own falling wedge. This is another indicator that tells us that bulls are gathering significant momentum.

The strategy is to buy the breakout as close to 0.000027 as possible. Those who bought the bottom at 0.00001887 are now taking profits. This can be an opportunity for you to buy the dip.

The successful backtesting of the breakout will likely generate the momentum needed to take the market to our target of 0.000052. The process may take a month.

Daily Chart of WaBi/Bitcoin on Binance

As of this writing, the WaBi/Bitcoin pair is trading at 0.00003201 on Binance.

Summary of Strategy

Buy: Backtest of breakout as close to 0.000027 as possible.

Target: 0.000052

Stop: 0.000026

 

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.