The NavCoin/Bitcoin pair (NAV/BTC) breached resistance of 5,000 satoshis on September 22, 2018. This triggered the breakout from the rounding bottom pattern on the 4-hour chart. The price action attracted breakout traders and trend followers. This sparked a strong rally to 9,230 satoshis on the same day.
Of course, the strong rally was met with fierce selling. After all, NAV/BTC was extremely overbought on the 4H RSI. As bottom pickers and breakout traders sold positions, the market dropped to as low as 4,290 satoshis on October 12.
Even though the market went below the breakout of 5,000 satoshis, it would have maintained its bullish momentum if not for the massive dumps over the last two weeks. The good news is that NAV/BTC has managed to maintain the midpoint of the current range amidst the selloff.
Technical analysis shows that NAV/BTC is preserving support of 4,000 satoshis. We believe the market will hold this level for the following reasons.
First, we are seeing a bullish divergence on the 4H RSI. This suggests that bulls are beginning to gather strength at these levels.
In addition, you can see long wicks below the daily candle’s body every time the market tries to go below 4,000 satoshis. This is a sign that participants are rejecting attempts to go below the support.
Lastly, the thin volume over the last few days favors the bulls. This means that participants are holding on to their positions. However, buyers must show up soon or else those who are holding might be tempted to sell considering market conditions. Thus, it is important to watch volume levels.
The strategy is to buy the dip, as close to 4,000 satoshis as possible. If bulls hold the line, they will likely inspire a rally to the top end of the current range at 5,000 satoshis. The process may take a month.
Daily Chart of NavCoin/Bitcoin on Binance
As of this writing, the NavCoin/Bitcoin pair is trading at 4,270 satoshis on Binance.
Summary of Strategy
Buy: As close to 4,000 satoshis as possible.
Target: 5,000 satoshis.
Stop: 3,890 satoshis.
NOTE: a satoshi is the smallest unit of Bitcoin, which equals to 0.00000001 BTC.
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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