Cryptocurrency Point & Figure Buy Signals
Analysis utilized is the charting style known as Point & Figure. Point & Figure is an unambiguous style with clear rules for going long or short.
The chart above is Cardano’s Bitcoin chart (ADABTC). A double bottom has been made at the 420 sat level, but price is current trading above that zone. A new column of Xs will form if price moves up to 480 sats. And a double top will form if price moves up to 500 sats. The long entry here is when that double top is broken. An entry at 520 sats would fulfill the entry requirements on this chart.
The chart above is Nexo’s Bitcoin chart NEXO (NEXOBTC). Nexo has a buy entry at the present time. It has a very bullish setup with a break of a triple top formed at 8000 sats, the entry is at 8250 sats. Not shown are the downtrend lines at 11000 and 11750. If price can move and break those two down trendlines, then NEXO would have massive upside potential. There is a potential to see a 5x increase from the present value area before NEXO would intercept any historically strong resistance zones.
The chart above is Zcash’s Bitcoin chart (ZECBTC). Zcash is easily one of the worst performing privacy coins and cryptocurrencies in the entire cryptocurrency market. Since February of 2018, Zcash has continued to make significant lows against Bitcoin and the US Dollar. And since December of 2018, Zcash has consistently created new all-time lows against Bitcoin. The current column of Os is a fairly large one – the second largest drop since the beginning of the drop in February of 2018. I would consider this ‘pole’. Trading a pole on a Point & Figure chart is different from how one would you would trade it. On a candlestick chart, we normally observe price retrace around 50% of the move before it continues in the direction it has previously traded. We do the opposite on a Point and Figure chart. Instead, we wait for the 50% Fibonacci level to be broken and then entry on that break. For Zcash, that would mean we enter at 0.008. Pole charts are indicative of a reversal, so it will be very interesting to see if this pole reverses and if it will generate a broader overall trend change.
The chart above is 0x’s Bitcoin chart (ZRXBTC). Just like Zcash’s Bitcoin chart in the above paragraph, 0x has continued to create new all-time lows against Bitcoin on a consistent basis. The current column of 0s is an interesting one. There has been a clear break of a double-bottom at 1600, but it is one of the only times where we have not seen a strong continuation move lower. It is very possible that 0x’s chart is displaying a possible bear trap. A bear trap on a Point and Figure chart is a condition where an initial short signal has been generated, but it reverses and creates a buy signal. If creaetsa a double top at 1900, then an entry at 2000 would be a break of that double top and could generate some significant upside potential.