The Gnosis/Ethereum (GNO/ETH) pair lost all bullishness when it created a lower high at 1.35 on June 30, 2017. The downtrend was confirmed when it closed below support of 1.00 on July 29. From that point, the market tumbled as it created a series of lower highs and lower lows. It eventually bottomed out at 0.16007788 on November 12. In less than five months after generating a lower high, the market lost 88.14% of its value.
Less than two weeks after establishing a bottom, the market flashed signs of life as it went as high as 0.31 on November 24. The market started to rally as bulls pushed prices up to 0.48889556 on January 5, 2018. Bears, however, defended the 0.45 resistance level, and sent the market tumbling down to support of 0.16. The recent plunge is your opportunity to enter the market at a favorable price.
Technical analysis show that GNO/ETH appears to respect the 0.16 support level. A successful retest of this support indicates that bulls are prepared to absorb selling pressure when the market drops at this level. In addition, volume for the last five trading days has been anemic. This suggests that sellers are no longer interested to dump positions at this price level.
The strategy is to run the classic buy the support and sell the resistance play. Buy as close to 0.16 support as possible, and sell as close to 0.45 resistance as possible. With the market very close to 0.16 support, the march up to 0.45 might take a month.
Daily Chart of Gnosis/Ethereum on Poloniex
As of this writing, the Gnosis/Ethereum pair is trading at 0.16667232 on Poloniex.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.
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