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.
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.