BINANCE:XLMBTC is our next coin of discussion. Take note of the similarity between our approach to this coin and how we are trading BINANCE:POEBTC . I've provided a link to that trade, which is still active.
It looks as though BINANCE:XLMBTC is forming a . Should the break, we could see profits of up to 69%.
Using the height of Pole A, we can estimate the peak of the second rise; should there be one. The estimated peak from Pole B just happens to also stop at the peak of our Fib Extension.
Look for the price to break the . Although, if the price reaches the end of the , then we are looking at an entry point below the 0.236 Fib level. Look for an entry between the 0.236 and 0.382 Fib levels.
We're going to wait until this trade develops some more before determining a stop-loss.
- Although the 50-period MA (Blue) has just recently formed, if we try and envision the right side of the chart, we see the potential for it to continue it's current trend. Likewise, we would want the 20-period (Orange) to stay above the blue line.
We are now waiting for one or two more candles to appear above the line. Just as we did with POE , it may be smart to wait for the price to break both the and the 0.236 Fib level so that we can confirm an uptrend.
If you look at the chart below, you'll see that we've reached the 0.5 Fibonacii level which we get from the Fib Retracement tool. The last eight times that we've broken this level, we've closed the day with a bullish run. The last two times that we've tested this Fibonacci level after ab uptrend (A & B), we've had a drastic drop in price. i.e., large red candles. This time, however, we've had a gradual drop over the past 4 days. This indicates that there is support behind the current trend.
It would appear that we "should" be nearing the end of the downtrend, if not already at the bottom. Should this be the case, look for this to provide confirmation if there is a reversal.
Should the price close below the 0.5 Fibonacci level, look to enter a buy position at the 0.618 Fibonacci level.