Disclaimer: This is not financial advice. Please conduct your own research before making any trading decisions.
This analysis explores a potential scalping strategy for 1inch (1INCH) that considers both a breakout scenario from a discount zone and a counter-trend shorting opportunity.
Market Context:
1INCH is currently trading at $0.4226 with a 24-hour trading volume of $41.9 million. This significant increase of 84.60% compared to the previous day suggests heightened volatility in the market. The current price also suggests 1INCH is trading in a discount zone based on technical analysis.
Scalping Strategy:
This strategy offers two potential approaches depending on the price action of 1INCH:
Discount Zone Breakout: This approach focuses on capturing gains if the price breaks out of the current discount zone.
Counter-Trend Shorting (Riskier): This is a riskier approach that explores the possibility of profiting from a short-term price correction if the price rallies above a key level.
Discount Zone Breakout:
An alert has been placed at $0.455 to monitor price action. A rejection from this level could signal a potential breakout opportunity. If the price breaks below $0.455 and finds support, the ideal entry zone would be between $0.33 and $0.35. A stop-loss order placed below $0.3 is crucial to limit potential losses if the price continues to decline. The profit target is set at a premium level, aiming for a gain of approximately 39% if the price successfully breaks out of the discount zone.
Counter-Trend Shorting (Optional, Riskier):
This approach is riskier and should only be considered if the price decisively rallies above $0.455. If the price momentum continues and surpasses $0.496, a short position could be considered. However, a stop-loss order placed above $0.534 is crucial to manage potential losses if the bullish momentum strengthens instead. The profit target for the short position is set at a 15% decrease in price, aiming to capture a quick gain if a short-term correction occurs.
Market Considerations:
Before entering any trade, confirmation signals are essential. In the breakout scenario, wait for a confirmation candle after the price breaks below $0.455. For the shorting scenario, look for bearish reversal signals if the price surpasses $0.496. Strict risk management is crucial, especially for the counter-trend shorting approach. Consider using a smaller position size for both approaches to minimize potential losses.