Trade Recommendation: Buy ETCBTC
Strong buying at the lows indicates that the selling was overdone and value seekers have started cherry picking at the bottom. If the subsequent pullback holds above the critical Fibonacci retracement levels of 50% or 61.8% of the preceding rally, it shows a lack of sellers and influx of buyers. We have a similar set up in ETCBTC. Let’s analyze the setup.
- ETCBTC has completed its pullback
- The cryptocurrency is likely to start a new uptrend, hence, qualifies as a buy
ETCBTC topped out on May 25 at $0.00952 levels. After spending a couple of months in a range, the cryptocurrency broke down of the range and started a downtrend from July 20. We believe that the bottom was made on November 02 at $0.00131001 levels. From the lows, the digital currency rallied to $0.00367794 levels by November 12, a 180% rally within a matter of 10 days. We have been waiting for a low-risk entry point, which has materialized now.
The virtual currency had been trading below the 50-day SMA from July 17 of this year. An attempt to breakout of the 50-day SMA failed on September 02.
Price finally broke out of the 50-day SMA on November 11. The bullish crossover of the 20-day EMA and the 50-day SMA has also completed on November 17. For the past week, price has not broken below the 50-day SMA, which is a bullish sign.
After a sharp rally, the subsequent pullback was arrested at $0.00209002 levels, which is just below the 61.8% Fibonacci retracement level of the rally from $0.00131001 to $0.00367794.
Since November 16, ETCBTC was stuck in a tight range of $0.00209002 on the lower end and $0.00240731 on the upper end.
Today, the cryptocurrency has broken out of the overhead resistance. As a result, we expect a new uptrend to start in ETCBTC. The rise from the current levels is likely to face resistance at $0.00288 and $0.0030 levels, being 50% and 61.8% Fibonacci retracement levels of the fall from $0.00367794 to $0.00209002. Therefore, traders should raise their stops to breakeven if they find that ETCBTC is struggling to move up.
We, however, believe that a retest of the $0.00367794 is likely.
Therefore, we recommend a buy at the current levels of $0.00246977 with a stop loss of $0.0020 levels.
Key levels in this trade
Buy at $0.00246977
Stop loss $0.002
Raise stops to breakeven if price struggles to breakout of $0.00288 and $0.003
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