The Modum/Bitcoin pair (MOD/BTC) attempted to breakout from the inverse head and shoulders formation on May 4, 2018. Our April 15, 2018 trade recommendation banked on this breakout. Unfortunately, the pair only generated about half of the required 1.5 million Modum volume. As a result, bears were able to hold on to the resistance
A false breakout usually inspires a selling frenzy as it sends the message that bulls are not yet ready to take over. This is why it is important to look at the volume when attempting to trade pattern breakouts. Heavy volume takes out sellers and inspires more buyers.
With lower than required volume, MOD/BTC plummeted. It went as low as 0.0001354 on May 26 before bulls rushed in to keep the pair stable. The price action may have signalled a tradable bottom.
Technical analysis show that Modum/Bitcoin is respecting support of 0.000175. This view comes after the pair has managed to stay above this level for about a week now. More importantly, we can see that MOD/BTC hovers above RSI support of 30. This hints that the pair is gathering momentum for a possible bounce. Lastly, the 4-day, 8-day, and 21-day moving averages are reversing their direction.
The strategy is to buy the breakout as close to 0.000175 support as possible. If bulls continue to stay above this price point, they will attract more buyers who can help push the pair to our target of 0.00025.
The process may take less than a month.
Daily Chart of MOD/BTC on Binance
As of this writing, the Modum/Bitcoin pair is trading at 0.0001847 on Binance.
Summary of Strategy
Buy: As close to 0.000175 as possible.
Target: 0.00025
Stop: 0.000166
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Thanks for sharing your tips man, I will check it out.