NEM (XEM/BTC) is a market that’s on the brink of pulling off a massive disbelief rally. The cryptocurrency has been in a downtrend against bitcoin since April 2018. At that point, the market posted an all-time high of 0.00004754. When the crypto winter hit, it drove NEM to lows of 0.00000726 on May 14, 2019. That’s a loss of over 82% in over a year.
Nevertheless, NEM is showing signs of recovery. A little more push from the bulls and it will likely “go to the moon”.
Technical analysis shows that XEM/BTC is painting a large inverse head-and-shoulders pattern on the daily chart. The structure is a little unconventional but it still meets the pattern requirements. Its neckline is around 0.000011. In other words, that’s the key level to breach for the bulls.
We are convinced that NEM will break out of the reversal pattern soon. First, the daily RSI has taken out resistance of 44. This triggered the breakout from a rounding bottom pattern. The breakout tells us that bulls are gathering significant momentum.
This bias is further supported by the significant volume uptick on May 16th. Looking at the Binance chart, the volume on that day is the highest ever recorded by NEM. This is a strong signal that bulls are heavily buying at current levels.
The strategy is to buy on breakout and the retest of 0.000011 as support. If bulls can convert this resistance into support, they will likely push the price to our targets of 0.000014 and 0.0000175.
The process may take a month.
Daily Chart of NEM/Bitcoin on Binance
Summary of Strategy
Buy: Breakout and retest of 0.000011 as support.
Targets: 0.000014 and 0.0000175.
Stop: 0.0000105 after the breakout and retest.
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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