The YOYOW/Bitcoin pair (YOYO/BTC) dropped to as low as 290 satoshis on September 12, 2018. At that price, the market was down by over 92% from the 2018 high of 3,885 satoshis. The losses put YOYO/BTC on the list of worst performing altcoins this year.
While the plummet would have discouraged retail investors from entry, bargain hunters and bottom pickers swooped in to pick up positions. More came as soon as YOYO/BTC recovered support of 300 satoshis on the same day. The recovery was a signal to market observers that support of 300 satoshis had completed a retest. A durable bottom was in place and the market used it to stage a rally that can ignite a bull run.
Technical analysis shows that YOYO/BTC is poised to take out resistance of 550 satoshis. Breach of this level would trigger the breakout from the double bottom pattern on the 4-hour chart. A breakout seems likely because the market has been generating several volume upticks since it successfully retested support of 300 satoshis. This tells us that participants are buying in bulk while the market is still cheap.
On top of that, bullish momentum has been on the rise. The 4H RSI has been respecting its uptrend support, which means it has managed to create a series of higher lows. This tells us that the buyers are no longer waiting for oversold conditions before placing buy orders.
The strategy is to buy the breakout at 550 satoshis as long as the market prints volume of 82 million YOYOW units. Those who bought the bottom will likely sell once the market hits the resistance. The pair needs buyers to take on the selling pressure.
Once breakout is complete, our initial target is 800 satoshis. Take that out and our next target is 1,000 satoshis.
The process may take more than a month.
4-Hour Chart of YOYOW/Bitcoin on Binance
As of this writing, the YOYOW/Bitcoin pair is trading at 519 satoshis on Binance.
Summary of Strategy
Buy: Breakout at 550 satoshis after volume of 82 million YOYOW units is met.
Target: 800 and then 1,000 satoshis.
Stop: 500 satoshis after the breakout.
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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