Stratis Nearing All-Time Lows, Is a Reversal in the Cards?

Full-time trader @CryptoMichNL outlined the Stratis price chart stating that the coin will be interesting once the price reaches the 3,750 satoshi support area, which he believes will not allow the price to drop further.

$STRAT #STRATIS

This one, I'm getting interest in, when we reach the 3750 area.

Should provide support for a while. pic.twitter.com/g8HK3oNXIM

— Michaël van de Poppe (@CryptoMichNL) January 7, 2020

Let’s take a closer look at the price movement and see if Stratis will get revisit its support.

Stratis Long-Term Reversal

In October 2019, the Stratis price reached a low of 3,080 satoshis, which was very near the all-time low price levels reached in September 2017. The price consolidated near this area for several months, while the weekly RSI was oversold and generated strong bullish divergence.

This began a strong upward move that reached a high of 5,955 satoshis. However, the price has been decreasing over the past three weeks and has almost fully retraced to all-time low price levels.

Five-Wave Elliott Formation

The upward movement that began on Oct 26 has the characteristics of a five-wave Elliott formation, and the ensuing downtrend looks like an A-B-C correction.

The important support and resistance areas are spaced out in increments of 600 satoshis, and the price is nearing the minor support of 3,400 satoshis. If this is not enough to successfully initiate a reversal, the price will likely complete a 100% retracement.

Trading Plan

Due to its long-term movement, the Stratis price is likely to initiate a reversal and end the current long-term downward trend. On the other hand, it is possible that the price breaks down below its all-time lows, at which point the rate of decrease would likely accelerate.

In the short-term, the price has not created a trading structure nor has shown any signs of reversal. But, it is approaching a significant support area.

Therefore, it is possible to minimize the risk of losses while also positioning for a possible future upward movement. The following values are for the purposes of an exercise on averaging buy orders.

Setting buy orders at the following prices for the indicated amount will give us an average entry price of 3,201 satoshis.

• 1000 Stratis at 3410 satoshis
• 1500 Stratis at 3310 Satoshis
• 1500 Stratis at 3210 satoshis
• 2000 Stratis at 3110 Satoshis

Afterward, setting a stop loss below 3,000 satoshis would represent a loss of only 6.3%. An upward move to the top of the range at 6,000 satoshis would represent a risk-to-reward ratio of 1:12.81 while a movement to the prior breakdown level of 20,000 satoshis would represent a massive 75:1 R:R ratio.

To conclude, the Stratis price is free-falling in the short-term, approaching a significant support area. In the long-term, the outlook remains bullish and a long-term upward move could follow soon. A breakdown below 3,000 satoshis would invalidate this possibility.