Trade Recommendation: Zcash
The Zcash/Bitcoin exhausted all bullishness when it created a lower high of 0.167 on June 20, 2017. The downtrend was confirmed when it broke below critical support of 0.12 on July 1. From that point, the market created a series of lower lows and lower highs. It took the pair five months to find stability.
On December 8, the market bottomed out at 0.01655895. In less than six months, the pair lost 90% of its value. That’s why when it established support at 0.02, the market quickly bounced. It knocked on resistance of 0.05 on January 10, 2018. While bears still control 0.05, it appears that bulls are preparing to reclaim that level.
Technical analysis show that the market is creating a bullish inverted head and shoulder reversal pattern that hinges on the breach of 0.05. To have a good chance at taking out this resistance, the market needs a volume of more than 2,000 bitcoins. Those who bought at the bottom will most likely take profits at 0.05. The pair needs a fresh set of buyers who can absorb the selling pressure.
The strategy is to buy the breakout at 0.05 with the prescribed volume. Take out this resistance level, and we have a target of 0.08, which could be achieved in a month after the breakout.
Daily Chart of Zcash/Bitcoin on Poloniex
As of this writing, the Zcash/Bitcoin pair is trading at 0.041941 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.
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