Enigma (ENG/BTC) came back to life with big moves over the last few days. A couple of days ago, on November 20, 2018, the market created a new yearly low of 0.000068. From that point, Enigma surged with a vengeance. It breached multiple resistances including 0.00008 as it climbed as high as 0.00009945 on November 21.
At that price, the market was ripe for profit-taking. It was overbought on the 2-hour chart. On top of that, Enigma created a long wick on top of the 2H candle. This suggests that bottom-pickers were locking in gains. While the move appears to be a sell rally, it is giving us the opportunity to buy the support of the accumulation range.
Technical analysis shows ENG/BTC is currently correcting. The correction, however, is creating a bullish pennant on the 2H chart. With this pattern, Enigma appears to be en route to support of 0.00008. This area is very important to the market because it used to be the bottom end of the accumulation range that stood from September 12 – November 19.
Unfortunately, the November 19 crypto carnage drove many altcoins below their crucial support levels, Enigma included. Nevertheless, yesterday’s high volume surge is a signal that the breakdown was a bear trap. If ENG/BTC successfully retests the support, then we have the classic Wyckoff Spring. This will likely ignite a rally to the top end of the range.
The strategy is to buy as close to 0.00008 support as possible. As long as the market stays above the support, it has the momentum to climb to our target of 0.000106.
The process may take a month.
2-hour Chart of Enigma/Bitcoin on Binance
As of this writing, the Enigma/Bitcoin pair is trading at 0.00008514 on Binance.
Summary of Strategy
Buy: As close to 0.00008 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.
Featured image courtesy of Shutterstock.