DGD/BTC - Heading for a big breakout

DGD/BTC is heading for an epic breakout.

Since the huge 100%+ rise on the 2nd Feb it has been swinging between momentum cycles (15% - 45% swings), but now we've reached a stage where the bulls and bears can't land a knockout blow. This means there's a huge amount of pressure building up in the background, and one side will have to give. The side that gives is likely to surrender completely for a short period, leading to a large and violent price move in their direction.

At this stage it's looking a little bearish (60/40), but these situations can go either way.

I'd be looking to set a conditional buy in order above the previous high shadow (so something in the vicinity of 0.04700 - 0.047800 depending on your risk levels) for a long entry, and the reverse for a short. If you want to wait and try and catch the bottom (difficult in a breakout), remember to not move until either direction has broken it's first level of support and resistance . Otherwise you could get trapped.

I generally always like to set a fairly tight stop loss with these as well. The price tends to move up or down so quickly that trailing shadows aren't a huge problem, and you also want to protect yourself given the speed in which these can occur.

I'll update the Idea if the breakout occurs.

Cheers and good luck,
Comment: Bullish momentum has temporarily broken the bearish momentum line.

We now need VZO to follow suit (indicating bullish volume increase), and then price.

I've indicated critical levels for both bullish and bearish behaviour, and I won't be entering either a long or short trade until these levels are reached.

Comment: The process is still ongoing - delayed somewhat by the new vulnerability in the bitcoin market. VZO and momentum indicators are still following the narrowing trend that has existed for a few days now, so I'm still (barring any change) expecting a breakout event to occur within 2-3 days.

Also, it would be worth looking for a short-term upward swing for DGD over the next few hours. Momentum has hit the bullish momentum line, and prices have been mirroring momentum swings closely for the last 3-4 cycles.

Comment: Well, I was right - just not the way we had hoped :) DGD/BTC promptly lost almost 20% of it's value from it's high at 1am (AEST).

So the squeeze happened and the bears won. Not overly surprising given the crypto market!

The one really strange thing is how level the VZO has stayed, indicating that there's still a fair bit of bullish activity in the market. Not suggesting it's going to rise soon, but I've set some alerts and I'll keep an eye on it.

I'll consider this analysis closed unless something very interesting happens!

Comment: Thought I'd update as the DGD breakout is on. Completely different to my analysis, so not taking credit. It's been a fast break as well, so I'm in but keeping a close eye as it could be a pump n dump. Potentially not as it had been building for a bit, but always have to be cautious.
i think your spot on here, the new lower channel thats happened is because BTC dipped down and now that its since gone up i see this chart playing out like how you were implying. it could take mabe a few small swings but if the volume is good, it looks to break out again soon reaching that .04 then .05 support levels, hopefully short term
+1 Reply
@ant1123, Yep, watching it closely :) Thanks for the comment!
Hi, your idea is for holding this coin?
@zarkav, Hey! I was just looking at DGD, actually. It's a different scenario before as the underlying pressure is far less, so the potential for a quick breakout has passed. But it's set itself into a consolidation zone over the last 24 hours, and is coming up to test that level again for the second time. Momentum/VZO are both showing (slight) upward trends, so there is some new bullish action coming in. I'd really like to see a decent breakout from the consolidation zone on a high volume bar - for me, that'd be a sign of a good new trend. So, keep an eye on it, and if it breaks through that area with some nice volume I'd consider jumping in.

DreamsDefined DreamsDefined
@zarkav it tested that level and pulled back from the top - not a great sign. We want it crashing through that consolidation resistance. So I'd say it'll pull back now. But watch the volume - it tells everything in cases like this.
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