Trade Recommendation: Zcash

The Zcash/Bitcoin pair (ZEC/BTC) ignited its bull run when it took out 0.04 resistance on January 7, 2018. This triggered the bullish inverse head and shoulders pattern on the daily chart. The force of the breakout pushed the market to as high as 0.0588 on February 10. At this price point, the market has achieved the target of the inverse head and shoulders pattern.

Savvy traders equipped with this knowledge started dumping positions to lock gains. As a result, the market tumbled. It broke below 0.04 support on February 20. Bulls tried to keep that territory but selling pressure was so strong that the pair continued to plunge. While the ZEC/BTC has fallen, this could be your chance to pick the bottom.

Technical analysis reveal that Zcash/Bitcoin is about to hit firm support of 0.03. When it does, the market would most likely be in oversold territory. It should provide selling relief that can start a rally.

The strategy is to buy as close to 0.003 support as possible. If the market respects this level, ZEC/BTC will likely use it as a base to climb to our target of 0.05. The process may take more than a month.

Daily Chart of Zcash/Bitcoin on Poloniex


As of this writing, the Zcash/Bitcoin pair is trading at 0.03125402 on Poloniex.

Summary of Strategy

Buy: As close to 0.03 as possible.

Target: 0.05

Stop:  0.028

 

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.