Trade Recommendation – Waves/BTC

When a downtrend ends, it either results in a consolidation or a start of a new uptrend. If we can spot a trend that is about to change from down to up, it offers us an opportunity to buy at the beginning of a new trend. Such positions can be held until the trend lasts. One such cryptocurrency pair that looks to have bottomed out and is on its way to starting a new uptrend is Waves/BTC. Let’s see its chart patterns and understand why we like it.

Key observations

  1. The downtrend in Waves/BTC has ended.
  2. It should soon start a new uptrend.
  3. Buy at $0.00083 with a stop-loss of $0.0006

Weekly chart

Waves/BTC embarked on a stellar rally in March of this year that took it from a low of $0.00014 in end-February to a high of $0.002642 in end-May, which is a 1787% rally. Thereafter, the cryptocurrency entered a prolonged decline, where every pullback faced selling at the downtrend line. Last week, the digital currency broke out of the downtrend line, which suggests that the downtrend is over. However, currently, it is facing resistance at $0.00078649. Once above this level, we expect it to start a new uptrend. Let’s see the critical levels to watch out for.

Daily chart

Waves/BTC has been range bound for about a month. It is attempting to form a double bottom around the $0.0004 mark. It broke out of the overhead resistance on December 12, but could not sustain the breakout. It subsequently fell back into the range once again. We believe that if it can breakout above $0.00079 levels, it will start a new uptrend and move towards its target objective of $0.00121 and higher. Therefore, we recommend long positions on a breakout above $0.00083 with a stop-loss of $0.0006. Traders can book partial profits at $0.00121 and trail the stops higher on the remaining positions for higher target objectives of $0.00134 and $0.00169.

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.