While we wait for Bitcoin (BTC/USD) to bottom out, let’s continue looking for altcoins that have established a clear short-term bottom. One that fits the category is NXT (NXT/BTC). This altcoin printed new yearly lows of 0.00000742 on December 15, 2018. At that price level, the market was down by just over 85% from this year’s peak of 0.00005023.
This altcoin may look extremely bearish but it is ripe for a bounce. With the market trading close to the yearly lows, we have an opportunity to enter positions with a very favorable risk to reward ratio.
Technical analysis shows that NXT/BTC has established a short-term bottom at 0.0000075. This level may not seem important but a look at the weekly chart shows that this is the cryptocurrency’s parabolic support. The market rejected lower prices at this level in November 2017. Then, this coin used the support to launch a strong rally that sent the market to as high as 0.00014 a year ago.
Thus, the market’s ability to stay above this level is not a coincidence. This may not be the bottom or the point of reversal but we can expect NXT to give us a meaningful bounce at this point. It is also possible that this crypto will trade sideways from hereon. For now, however, we’ll just play the bounce.
The strategy is to buy as close to 0.0000075 support as possible. As long as bulls stay above this level, NXT will likely rally to our target of 0.00000935.
The process may take less than a month.
Daily Chart of NXT/Bitcoin on Poloniex
As of this writing, the NXT/Bitcoin pair is trading at 0.00000767 on Poloniex.
Summary of Strategy
Buy: As close to 0.0000075 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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