The SONM/Bitcoin pair (SNM/BTC) jump started its bull run on December 29, 2017 when it breached resistance of 0.000025. Its momentum was so strong that it went as high as 0.0000475 on January 7, 2018. In less than two weeks, the market grew by 90%. This was enough for breakout players to take profits.
As selling became the theme, the pair tumbled to as low as 0.00002378 on January 17. While the market tried to recover, it was a dead cat bounce as it generated a lower high of 0.00003617 on January 29. Sensing that the market has lost its bullish momentum, participants dumped their positions. The market broke 0.000025 support on February 14 as a result.
Technical analysis show that SONM/Bitcoin has triggered the toppish head and shoulders pattern on the daily chart when it took out 0.000025 support. The target of this pattern is 0.000008. Interestingly, 0.000008 is a firm support level. You can use it to bottom pick the market.
The strategy is to wait for the market to drop, and buy as close to 0.000008 support as possible. At this point, bears would likely be exhausted. The bulls can then enter the picture to create a new base which would be used to climb to our target of 0.000025. This process may take more than a month.
Daily Chart of SONM/Bitcoin on Binance
As of this writing, the SONM/Bitcoin pair is trading at 0.00001487 on Binance.
Summary of Strategy
Buy: As close to 0.000008 as possible.
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.
Featured image courtesy of Shutterstock.