Hypothesis

TAO has had a huge surge in demand, and we are looking to take advantage of this momentum and potential upcoming wick-fill & beyond.

Disclaimer: This is not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. "One Glance" by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. These are not signals, and they are not financial advice.

Technical analysis

Much of this analysis is framed around two key levels in terms of LOIs.

The initial level of buy box one is $600.00, which has a play centred around potential outcomes.

We then have a second scenario with even higher conviction if the market brings price down to around buy box 2, 'The scene of the crime,' which is around 560.00.

We are going to split this into a 2-play scenario. But given the recent surge of demand, it's likely this wick will be filled essentially, so we are going to take advantage from a technical point of view using our framework.

Play for traders

Scenario 1

Buy Box 1 is placed because this level has seen some significant movements historically. So we may see bouncing and a floor being held now, and we are back trading above it.

For this scenario to play out, it's about patience. We will want to clearly see further demand in the form of wick rejections to the downside and 4hr daily candlestick closures positive above this level.

From there, it would most likely be a market order in and around this price point, but this would be a very wide stop loss based on the fact the higher conviction play here really is the secondary buy box.

Read this carefully. You can split risk across both buy boxes, with a small position in the first buy box and a potential hold through drawdown if the market pulls deeper back into buy box 2. Now, let's discuss scenario 2.

Scenario 2

This is the higher conviction play because the return on the trade will be greater to take profit but also because the level is stronger and it's the scene of the crime level.

For smaller players, I would advise waiting to see if this level comes into play. Those with larger capital and more experience managing and holding positions can take advantage of the scaling option: a limit order around buy box one and LOI 1 and then splitting risk to take advantage of the second buy box with more conviction. This ensures you get skin in the game.

In short - smaller players wait for buy box 2, more experienced larger players could take advantage of the scaling options with two different positions split across the levels.

The stop loss would be 505.50, which gives a 10% drawdown from buy box two and a 15% drawdown from buy box 1. These are both trades with an acceptable risk-to-reward ratio targeting the wick-fill.

Take profit: $787.11

LOIs

• $600.00
• $560.00

Play for investors 

There is really nice price action and upside potential here.

DCA is in and around the two buy boxes.

Use this as a range to aggressively accumulate here.

Cryptonary's take

We are levelling up this and implementing more sophisticated trade execution and management strategies.

This isn't necessary all the time, but this is a relatively hot asset right now with hot price action, and there are ways of capitalising on such plays in a multiple-scenario approach while still following the underlying key framework we have for conviction.