Technical Analysis - Digibyte
DGB/BTC - 12/19/2019
As shown in the chart above, we will be analyzing the technical status of Digibyte against Bitcoin.
We will be asking a series of questions to come to a reasonable conclusion:
What is the current market structure?
Currently, what we see on the 3D timeframe is a beautiful bottoming process. This process is showing the needed and anticipated strength in an area of support, creating large bounces and bullish local structures. Just as the one we are seeing right now. Locally, it seems to be an ascending triangle, which mostly is a bullish local structure, starting with an uptrend, a consolidation below a local resistance, and then a breakout.
How likely is a breakout?
As mentioned above, we are looking at a potentially local bullish structure. What we need to watch out for is not to react primitively and remain reactive. The rules on this structure are to wait for a breakout and look for entries either directly on a breakout or a re-test of the resistance. The most significant risk here is that DGB could still, at any point, decide to re-test our green area of support, confirming the bottom once again without even changing the bullish narrative.
What impression give the indicators?
The MKAST Algorithm gave a Buy-Signal quite a while ago. Considering rather aggressive settings, the possibility of a Sell-Signal increase with each candle. Especially in a very choppy and indecisive market, it is not the optimal entry right now. The TJ-Index is showing a slow increase and is not in a dangerously high area, which does indeed leave the possibility for a breakout.
As elaborated above, DGB is in a bullish structure, locally and generally. An increase and breakout seem to be reasonable to believe. Nevertheless, the risk-management aspect is most important here, and it should not be disregarded.
This Technical Analysis is made by Kong Trading. The provided Analysis should not be considered financial advice!