Cryptocurrency Analysis: Litecoin surges again
My last column discussed the possibility of a close above the 1st arc pair yielding a buy signal. As it turned out, while price crossed the arc for a period, it did not close there. So to date we are still waiting on a buy signal on the daily chart. Tomorrow is an “energy day” (red vertical line). Given that we are still below the arc pair, there is a significant chance that the market will break down, rather than up. My suggestion is that traders be very cautious here.
Ethereum is still in bullish territory, despite it’s lack of vigor recently. It crossed the 2nd arc pair, but has been hindered by lack of conviction ever since. However, it seems that it is destined to at least rally to the 3rd arc at ~ $63 in the not-distant future. The vertical line is an energy point. Will it be the start of a rally, or will it be a top? It’s still too soon to tell. We will see…
Litecoin has been my favorite trade for the past 2 weeks, and it has not disappointed. It has now almost quadrupled since the rally started. Last night’s rally went through resistance I expected to have more stopping power. As seems to be happening more and more often, my take-profit order was hit way too soon. This is a bittersweet experience. Obviously I’m happy to have hit my target, but wish I had set it higher.
So what’s next?
This setup on the daily chart reveals a few clues. First notice the dotted red line at 45 degrees. (red arrow). That is the 1×1 Gann angle from the ATH in 2013. A close above this line is not trivial. It represents a cross into the “bullish half” of the chart .
As we can see, the advance was stopped by the 1st arc pair on this longer-term setup , BUT, before retreating, pricetime penetrated both of the arcs (blue arrow). This suggests that the arcs are vulnerable. In other words, the odds are good that at some point in the not-distant future the arcs will be tested again, and will yield again. Time will tell.
In the meantime, I imagine price might go back down to test the 1×1 from the ATH at ~ $12. But I would guess that the 1×1 support will hold and a trading opportunity will present itself.
Remember: The author is a trader who is subject to all manner of error in judgement. Do your own research, and be prepared to take full responsibility for your own trades.