Trade Recommendation: ZRX
The 0x/US Dollar (ZRX/USD) pair is down by over 90% from the 2018 high of $7.10. For the most part of this year, ZRX has been trading in wide range between $2.50 – $0.35. Those who were able to buy the bottom of the range have made a killing as they were able to grow their investments by over 500%.
However, with the range beginning to narrow, it seems that those days are over. Bears have been recently flexing their muscles as they’ve managed to put two lower highs in place. Nevertheless, it looks like there’s an opportunity to trade the next rally.
Technical analysis show that ZRX/BTC has broken out of a small falling wedge pattern on the daily chart. This pattern is within a large symmetrical triangle. This view comes after the pair came off lows of $0.62 on August 14. The bounce showed that 0x respects the trendline. This emboldened bulls to break out of the falling wedge.
In addition, the RSI is also showing signs of bullishness. It also broke out from its own falling wedge. While the RSI is currently retreating, we can expect the former resistance to act as support. Should the new support hold, we might see a surge in bullish momentum.
The strategy is to buy as close to $0.66 support as possible. The triangle is currently in the latter stages of the E-wave, which is often the last leg down. If bulls defend the support, we will likely see a quick rally to $1.00.
The process may take less than a month.
Daily Chart of 0x/US Dollar on Bitfinex
As of this writing, the 0x/US Dollar pair is trading at $0.7134 on Bitfinex.
Summary of Strategy
Buy: As close to $0.66 as possible.
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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