The best way to profit on the bullish side is to buy in an uptrend or buy when the trend changes from down to up. A reversal pattern at the lows allows us to enter into a new developing uptrend at a low-risk. If the trend sustains, we can ride it up. One such bullish reversal setup is the inverse head and shoulders (H&S) pattern. We find this pattern on the Zcash/Bitcoin pair; hence, we want to buy it.
Key Observations
- Zcash/Bitcoin is forming an inverse head and shoulders pattern at the lows.
- We believe the cryptocurrency pair will start a new uptrend.
- Buy ZECBTC at 0.047, SL 0.0315, Target 0.0744 and 0.1022
Weekly Chart
Though ZEC/BTC pair hit a high of 350 on October 24, we consider it to be a freak trade because on the same day it closed at 0.995121. From there, it declined to a low of 0.02265535 in end-February of this year. The subsequent recovery carried it to 0.1696 in mid-June. Thereafter, the cryptocurrency pair again fell to a low of 0.01651678 in early-December. Since then, there is an attempt to recover and we want to ride this move up.
Daily Chart
The ZEC/BTC pair is currently in a downtrend. However, it has formed an inverse H&S pattern at the bottom, which will complete on a breakout and close above the neckline at 0.0455. The downtrend line is close to the current levels. So, once the pair breaks out of both the downtrend line and also completes the inverse H&S, we expect it to start a new uptrend. The pattern target on a breakout of the inverse H&S is 0.0744. If this level is crossed, a move to 0.1022 is also possible.
Therefore, we can buy on a breakout above the neckline at 0.047 and keep a stop-loss of 0.0315, just below the right shoulder.
Featured image courtesy of Shutterstock.
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source https://cryptocurrencyonline.co/trading-recommendation-zcash-bitcoin/
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