- ACH/USD jumped 50% in one trading day
- A falling wedge pattern supports the bullish case
- The risk of a false breakout remains
The cryptocurrency market suffered from the FTX scandal as investors fled away in light of yet another scam in the industry. But despite the numerous predictions that the industry will fail, the recent price action is encouraging for speculators.
Take, for instance, Alchemy Pay (ACH). It was the leading cryptocurrency yesterday, as it gained about 50% against the US dollar.
Alchemy Pay is the pioneer of the world’s first payment gateway solution to connect fiat currencies and crypto economies. In short, it aims at building a bridge between crypto and fiat worlds.
With a circulating supply of 4.9 billion, the cryptocurrency’s maximum supply will be 10 billion. At the current market price, Alchemy Pay has a market capitalization close to $60 million, and over 180 billion coins are traded daily.
A falling wedge points to more upside, but fears of false breakouts remain
Until recently, ACH/USD traded with a heavy tone – just like the overall cryptocurrency market. But the recent bounce in Bitcoin and other major cryptocurrencies led to small coins catching a bid.
As such, the price action broke out of a falling wedge pattern. Such a pattern signals a reversal; most of the time, the market retraces more than half of the pattern’s distance.
However, it does not mean that the market cannot make a new low.
Therefore, any long trade should have a stop-loss order at the lowest point in the falling wedge, while the take-profit should be placed around half the distance the market traveled on its way lower. In other words, 0.035 should be appropriate.
The fear is that yesterday’s bounce is yet another false breakout. A quick look at what happened in the past shows similar breakouts that turned out to be nothing but false ones as the market reversed and made a new low.
Summing up, if the recent lows hold, ACH/USD has more upside potential.