On our August 23, 2018 trade recommendation for Cardano/Ethereum (ADA/ETH), we emphasized the importance of breaking out with volume of 30 million Cardano units. The heavy volume would have helped the pair build a solid base at the breakout. More importantly, it would have relieved selling pressure. The more participants holding positions at the breakout, the thinner the supply circulating in the market.
Unfortunately, this volume requirement was not met. So while ADA/ETH rallied to as high as 0.0004047 on September 8, it eventually went below the breakout and dropped to 0.00030895 on September 15. The good news is that it appears that the recent pullback was the last hurrah of the bears. We have technicals to support this claim.
Technical analysis shows that ADA/ETH has not only broken out of a large symmetrical triangle pattern on the daily chart, but it also respected the resistance-turned-support of 0.0003. This is a defining moment for the market this year as it marked a new bullish higher low outside of the triangle. If the market can generate a higher high, then we’ll have the textbook definition of an uptrend. That’s what we’re playing for.
In addition, ADA/ETH is above the 30-day, 90-day, and 180-day moving averages for the first time this year. These moving averages will serve as firm support areas. They will reflect the overall health of the market.
The strategy is to buy as close to 0.00036 support as possible. As long as the market stays above the moving averages, it has the momentum to climb to our target of 0.00060.
The process may take more than a month.
Daily Chart of Cardano/Ethereum on Binance
As of this writing, the Cardano/Ethereum pair is trading at 0.0003744 on Binance.
Summary of Strategy
Buy: As close to 0.00036 as possible.
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.
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