Weekly Review: BCH Blasts Off

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April 5, 2019 Welcome to the weekly edition of the CoinDesk Markets newsletter! Every Friday we will review our cryptocurrency price predictions posted during the week via CoinDesk Markets Twitter  or our private room on StockTwits, the CoinDesk Dojo.  "Trades You Missed" will feature our favorite trade ideas or technical analysis insights that accomplished impressive gains, where as "Trades We Missed" will feature those that took a turn for the worse. Wins and losses are both part of the trading game, so we hope you will learn how to replicate our successes and minimize losses!   BCH Blasts Off BCH: Price: $295.86 | MCAP: $5.2 million | Maximum Gain: 73% Why we liked it: When BTC picks up a strong bid, the broader market tends to follow suit, and performances this week proved no exception after bitcoin surged more than 20 percent to climb above $5,000 on Tuesday.   Bitcoin cash (BCH/USD) was one of the largest benefactors of bitcoin’s move and our analyst Omkar noticed its bullish potential rather early, when it was trading around $204 on Coinbase on April 2.   The rational here was not overly complex, although his expert eye was able to detect nuances that may have turned off a more conventional trader.   First, what seemed appealing was the bullish market structure that had formed, as defined by a series of higher price highs and higher price lows. Next, the r elative strength index (RSI) was observed to identify any clues that could help or hurt the bullish case.   Traditionally an RSI value above 70 is a sign the market is overbought and due for a reversal, especially when observed on the daily time frame. At the time of this analysis, BCH/USD’s daily RSI was closer to 80, yet contrary to what many are taught, this was a bullish sign.   As a general rule of thumb, prices rising despite an overbought reading is actually a significant bullish signal that suggests the trend has the potential to remain intact for an extended period of time.   All said and done, the price of BCH jumped from $204 at the time of the post to a 20 week high of $354 just one day later, creating a staggering 73 percent profit potential.   Looking ahead, BCH/USD's price was able to close above the 200 day MA which will keep the longer term outlook bullish until its price finds acceptance below the MA.   The Trade The Result BAT Breaks Hearts BAT: Price: $0.294 | MCAP: $368.2 million | Maximum Loss: 0% Why we liked it: With so many cryptocurrencies flashing impressive growth this week, we only had a couple trade ideas that didn’t go quite as planned.   For instance, on April 2nd we noticed Basic Attention Token (BAT/USD) was showing telltale signs of bullish exhaustion suggesting a bear reversal was a likely possibility.   The signs of weakness observed were the long upper wicks on the recent daily candlesticks, which portrays profit taking on increasing prices, as well as the RSI hitting significantly overbought conditions.   Despite the bearish concerns, BAT/USD went along to surge with the rest of the cryptocurrency market the next day to reach its highest price since Nov. 18, 2018 of $0.35.   In fairness, we did note that a pullback to the 10-day moving average (MA) was likely, and a bounce off of it would be a strong enough signal to re-enter a bullish position on BAT/USD.   As can be seen below in “The Result,” this is exactly what transpired.   Early April 2, BAT/USD’s price did in fact retreat down to the 10 day MA as low as $0.25, only to quickly surge back up nearly 40 percent to reach its $0.35 price tag.   Looking ahead, BAT/USD's future Ichimoku cloud is green and trending upwards for the first time ever, suggesting a sustainable bear to bull trend change may be taking place. However BAT will need to find acceptance above the daily resistance of $0.36 for greater confirmation. The Trade The Result   We're excited to announce the launch of the CoinDesk Dojo, a premium subscription part of StockTwits' recently announced Premium Rooms product. Ask the analysts—Omkar, Sam and Seb—questions about charts and talk with other traders looking to profit off the volatility of the crypto markets.  Create an account on StockTwits and then subscribe! Subscribe Here   Disclaimer: The information presented in this message is intended as a news item that provides a brief summary of various events and developments that affect, or that might in the future affect, the value of one or more of the cryptocurrencies described above. The information contained in this message, and any information liked through the items contained herein, is not intended to provide sufficient information to form the basis for an investment decision. The information presented herein is accurate only as of its date, and it was not prepared by a research analyst or other investment professional. You should seek additional information regarding the merits and risks of investing in any cryptocurrency before deciding to purchase or sell any such instruments. Copyright © 2018 CoinDesk, All rights reserved.  Our mailing address is:  250 Park Avenue South New York, NY, 10003, US  Want to change how you receive these emails? You can update your preferences or unsubscribe from this list