Trading recommendation: Lisk/Bitcoin
The best way to trade a range-bound market is to buy at the lower end of the range and sell at the upper end. If the range is large and well established, it offers us a good risk to reward objective. We believe that LSK/BTC fits the bill and offers us an attractive opportunity to buy at the support and sell at the resistance.
- LSK/BTC has formed a large trading range.
- Buy at the lower end of the range.
- Sell at the upper end of the range.
LSK/BTC has been trading in a large range of $0.00046 on the lower end and $0.0016 on the upper end. On three occasions, the cryptocurrency pair has bounced off the supports. Similarly, it has returned from the $0.0016 levels thrice. The range is well defined. Currently, price is trying to rebound after breaking below the lower end of the range last week. We believe that a buy at current levels offers us a low-risk and high-reward trading opportunity.
On December 07, the cryptocurrency pair broke below the support of $0.00046. However, the very next day, it climbed back into the range, which is a positive indication. This shows that the bulls want to keep the range intact. However, the rally from the lows hit a roadblock at the 20-day EMA.
Currently, LSK/BTC is again pulling back towards the lower end of the range. If the support holds, we believe that the digital currency will again rally to the upper end of the range. Therefore, we suggest buying 50% of the desired allocation close to $0.00050 levels. Remaining 50% of the position should be purchased once the digital currency breaks out of $0.00068. The profit objective is a rally to the upper end of the range at $0.0016. The trade should be closed if the virtual currency breaks down and sustains below the lower end of the range. This is a long-term trade.