The Ontology/Ethereum pair (ONT/ETH) breached resistance of 0.0045 on August 16, 2018. This triggered the breakout from the falling wedge pattern on the daily chart. The price action reversed the market’s trend and enabled the pair to climb to as high as 0.009756 on September 12.
At that price, breakout players and bottom fishers started to take profits. The selling drove the market down to 0.007775 on September 21. While this price movement might have forced those who bought the top to cut their losses, the reality is that the market is very bullish. We have technicals to support our claim.
Technical analysis shows that ONT/ETH is creating a large bullish pennant on the daily chart. This pattern indicates that the market is currently consolidating. Nevertheless, the uptrend remains intact.
In addition, technical indicators are showing that the consolidation is about to end. First, the daily RSI appears to have generated a higher low at 46. With a higher low in place, bulls have the room to rally without immediately flashing oversold readings. Furthermore, the volume is gradually declining. This shows that sellers are losing ammunition.
The strategy is to buy the breakout as close to 0.0088 support as possible. As long as the market respects the support of the pennant, it has to momentum to rally to our target of 0.014.
The process may take a month.
Daily Chart of Ontology/Ethereum on Binance
As of this writing, the Ontology/Ethereum pair is trading at 0.008998 on Binance.
Summary of Strategy
Buy: As close to 0.0088 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.