paaax

Trend-change or fake out?

Long
POLONIEX:DGBBTC   None
Hey guys, digibyte has shown a fantastic rally the last few days. I took some time looking at the chart to evaluate the current situation and get an idea of where the price is moving. The current rally offered a 189% gain if you were lucky enough to buy the low on 8th December. That's a massive gain in less than two weeks. The question is can it move up even further?

The past

Back in May 2017 I bought my first digibytes at 67 Satoshis and the price moved up to 2667 sats on the 3rd June. This move was caused by news that digibyte is competing in the "Citi® Tech for Integrity Challenge". People ignored the underlying technology and invested based on pure speculation. On 9th June reddit made digibyte "lose the challenge", which was never the case. Unfortunately, people started dumping the coin. A huge down-trend began. The same people, who were investing based on news and speculation, now were disappointed and started talking trash about digibyte. Ironically, on the 2nd of October digibyte has won an award, but there has been no further up-trend. Again, people, who were still invested and hoping for the "big" news, got disappointed and dumped another time. This long down-trend has shaken off everyone, who was not interested in the underlying technology, which in my opinion is very good.

The presense

Currently, digibyte is trading around 200 Satoshi. I've added the Ichimoku indicator to provide a clear picture, where the price is and where it might go. Coming from that huge down-trend, it is normal that the Ichimoku cloud (the kumo) is thick and red, signaling a down-trend. The current rally moved the price into the kumo, which is a sign of an undecided trend. To evaluate the whole Ichimoku indicator, I'll list a few signs:

  • Price vs. Kumo = Undecided, the price is in the kumo
  • Price vs. Tenkan-Sen = Bullish , the price is above the Tenkan-Sen
  • Price vs. Kijun-Sen = Bullish , the price is above the Kijun-Sen
  • Tenkan-Sen vs. Kijun-Sen = Bullish , Tenkan-Sen cross the Kijun-Sen from below
  • Tenkan-Sen vs. Kumo = Undecided, Tenkan-Sen is in the kumo
  • Kijun-Sen vs. Kumo = Undecided, Kijun-Sen is in the kumo
  • Chikou Span vs. Kumo = Bearish , Chikou Span is below the kumo, but very close to it. This could change.
  • Chikou Span vs. Price = Bullish , Chikou Span drastically above the price
  • Chikou Span vs. Kijun-Sen = Bullish , Chikou Span is
  • Kumo future = Bearish , the kumo is red and thick. That will change at the beginning of 2018.

Summary

To me, the signs of a trend-change are obvious, but that trend-change needs more time. Personally, I expect it to retrace down to the range of the 0.382 and 0.5 fibonacci level, before making a turn to the upside again. If you missed the first rally, this would be a perfect second entry. My advice here would be not to hunt the chart. Instead, wait for its retracement and grab some digibyte at the secondary entry. If you'd like to play it secure you could also wait for a kumo breakout followed by the Chikou Span confirmation. It's all up to your risk management.

http://www.pascal-simon.de - Custom indicator development