Zilliqa (ZIL/BTC) looked like it had more downside potential when it generated a fresh 2018 low of 0.00000347 on November 25, 2018. In hindsight, the move down to the yearly low was nothing but a shakeout, which is common in crypto. A couple of days after the market printed a new low, Zilliqa rallied significantly. It climbed as high as 0.00000497 on November 28.
This dump and pump scheme is something that we’ve seen in many altcoins recently. Enigma (ENG/BTC) and POA Network (POA/BTC) easily come to mind. If these coins are the leaders, then we should watch the pullback. Often, the market retraces close to the low but just around a key support level. We’re seeing this same pattern unfold in Zilliqa.
Technical analysis shows that ZIL/BTC is also pulling back after a rally. The surge may look like a dead-cat bounce but the volume expansion makes us think otherwise. After all, the last time the market printed volume that’s over 500 million Zilliqa units was in May 2018 when it traded above 0.00002.
In addition, the volume and price upticks happened while the market was trading around 0.0000038, which is the market’s monthly support. The green block on the chart shows the area of high demand. Zilliqa has always bounced after touching this demand area.
The strategy is to buy the dip as close to 0.0000038 as possible. As long as bulls hold this support, they are likely to ignite a rally to our targets of 0.00000526 and then 0.0000062.
The process may take more than a month.
Daily Chart of Zilliqa/Bitcoin on Binance
As of this writing, the Zilliqa/Bitcoin pair is trading at 0.00000416 on Binance.
Summary of Strategy
Buy: As close to 0.0000038 as possible.
Target: 0.00000526 and 0.0000062.
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.