Crypto Trade Strategy: Altcoin Breakouts

The crypto market’s volatility continues, but two altcoins—Prom (PROM) and Ethernity Chain (ERN)—are managing to stand out with notable price actions. PROM has skyrocketed by 34% after breaking out of a descending triangle, while ERN has climbed by over 4%, hinting it might be on a similar trajectory. Let’s break down their setups and what traders might expect.

Altcoin Movements in a Bearish Crypto Market

Even as the broader cryptocurrency market corrects, PROM and ERN are making waves. This section gives a closer look at their price movements and the underlying technical patterns.

PROM’s Breakout and Price Push

PROM is proving to be resilient, showing strong momentum after breaking out of a long-standing descending triangle that has persisted since March 2024. Today, it broke the important resistance at $6.70 and climbed to $7.30. With possible retests of this breakout ahead, the next resistance point sits at $7.87.

Technical Indicators for PROM

• MACD: The MACD has flipped bullish, signaling the momentum is on the side of buyers.
• RSI: The RSI is currently neutral, suggesting room for more upside without being in overbought territory.

A solid break above this level could open the door to further gains, possibly targeting $13 and $16.

ERN’s Setup and Breakout Potential

ERN is displaying similar characteristics to PROM, forming a descending triangle since the last bull run in 2021. Trading now at $2.38, it’s nearing its upper resistance trendline.

Technical Indicators for ERN

• MACD: On the cusp of a bullish crossover, indicating buyer momentum is increasing.
• RSI: In a balanced state, allowing for further upward movement.

A breakout above its resistance trendline could send ERN soaring to $3.86, translating to a potential 56% gain. If the trend strengthens, ERN could target the $8.75 resistance area, indicating even more substantial upside.

Basic Crypto Trading Strategies for Beginners

Those new to crypto trading should familiarize themselves with such technical patterns and indicators. Here are a few basic crypto trading strategies to guide your approach:

1. Look for Established Patterns: Identifying patterns like descending triangles can signal potential breakouts.
2. Monitor Key Indicators: Use MACD and RSI to assess market momentum.
3. Implement Stop-Loss: Use stop-loss orders wisely to safeguard your investments.
4. Diversify: Spread investments across various cryptocurrencies to reduce risks.

What Are Technical Indicators in Crypto Trading?

Technical indicators serve as valuable tools for traders. Here’s a quick rundown of the indicators discussed in this analysis:

• MACD (Moving Average Convergence Divergence): Highlights changes in trend direction, strength, momentum, and duration.
• RSI (Relative Strength Index): Evaluates the speed and change of price movements to identify market conditions.

Summary: Key Takeaways from the Crypto Trading Markets

The recent performances of PROM and ERN illustrate the potential for considerable gains in the current crypto market environment. PROM has confirmed a breakout and is advancing toward higher resistance levels. ERN mirrors PROM’s prior setup and awaits a breakout of its own.

Both assets are sending encouraging signals on critical technical indicators, making them candidates for traders eyeing the market. However, market dynamics are ever-changing, and prudent strategies and risk management remain paramount.