Trade Recommendation: Zcash

The Zcash/US Dollar pair (ZEC/USD) lost almost 70% of its value this year when it dropped to $150.10 on July 12, 2018. With such a huge plummet, some investors might think it’s prudent to stay on the sidelines for now and wait for a clear sign of reversal. While they wait, we think there’s a good opportunity to bottom fish the market. We have technicals to support our view.

Technical analysis show that Zcash/US Dollar has broken out of a falling wedge pattern on the daily chart. The breakout comes after the pair dropped to long-term support of $150. This inspired the market to rally to as high as $222 on July 2. The rally, however, was short-lived as those trapped around $200 dumped positions to minimize losses. Nevertheless, ZEC/USD continues to show signs of strength.

First, the retest of support on July 12 and 13 was a huge success. Currently, we can see the pair creating a bullish pennant on the hourly chart. On top of that, the market has managed to turn the daily RSI resistance of 46.65 to support. Lastly, we can see a long bullish divergence on the daily MACD.

The strategy is to buy as close to $170 as possible. If bulls stay above this level, the market will likely rally to our initial target of $240. Take that out and the market has an easier path to $280, but that may take some time.

The process may take more than a month.

Daily Chart of ZEC/USD on Bitfinex

As of this writing, the ZEC/USD pair is trading at $174 on Bitfinex.

Summary of Strategy

Buy: As close to $170 as possible.

Target: $240 first and then $280.

Stop: $164

 

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.

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