Trading Recommendation: Qtum/Bitcoin

No rally can continue incessantly. There are periods of consolidation along the way, which offer a low-risk entry opportunity to the traders who missed buying at the start of the trend. Pennant is one such pattern, which is formed after a vertical rally. If the price breaks out of the Pennant, we can expect the uptrend to continue. Therefore, a pennant is called as a continuation pattern. We find the same pattern on the QTUM/BTC cryptocurrency pair. Let’s look at the critical levels on it.

Key points

  1. Pennant is a continuation pattern.
  2. The Qtum/Bitcoin pair has broken out of the pennant. It should now resume its uptrend.
  3. Buy at 0.0036, stop loss at 0.0028, and book profits between 0.0046 and 0.0056.

As the cryptocurrency pair has a short trading history, we shall not be analyzing its weekly chart.

Daily chart

The lifetime high of 0.09 on the cryptocurrency pair was created on the opening trading print on July 20. However, the level never sustained and the pair closed the day at 0.00276, giving up all its gains. From there, the cryptocurrency rallied to 0.00569206 on August 10. However, since then, the pair has been in a long-term downtrend, reaching a lifetime low of 0.00060127 on December 08.

However, the recovery from the lows has been strong and the cryptocurrency reached a high of 0.00398997 on December 19. That is a 563% rally within 11 days.

Thereafter, QTUM/BTC entered into a period of consolidation, forming a pennant. Today, it has broken out of the pennant formation and we expect it to resume its uptrend. Traders can buy the cryptocurrency pair at 0.0036000 and keep a stop loss of 0.0028. Though the target on the upside is 0.005995, we shall book profits in batches between the levels of 0.0046 and 0.0056.

Featured image courtesy of Shutterstock.

Author:
Rakesh Upadhyay is a Technical Analyst and Portfolio Consultant for The Summit Group. He has more than a decade of experience as a private trader. His philosophy is to use technical analysis for momentum trading and fundamental analysis for long-term positions. Rakesh likes to keep himself fit by lifting weights and considers himself to be a spiritual person.