Litecoin Update: A Good Time to Buy on Dips
On our November 30, 2018 litecoin update, we told our readers that at that point, it would be a good time to accumulate Litecoins (LTC/BTC), especially if you have a long-term perspective. We made this call at a time when crypto was extremely bearish. Therefore, it would be understandable if some of you did not accumulate at that time.
Nevertheless, congratulations to those who did! If you accumulated positions, your investments would be up by over 30% as of this writing. Even better is the fact that Litecoin is moving as expected. It is attempting to breach a key resistance to make us entertain the idea of a bull run.
In this article, we reveal why it’s a good time to buy on dips.
Weak Bear Response
The primary reason why Litecoin is a buy on dips is that bears have shown their hand. Currently, bulls are working hard to take out our range high of 0.0098. The push north comes with healthy volume on both the daily and weekly charts. This tells us that bulls are testing the resistance. They are gauging the resolve of the bears to keep market control.
Weekly chart of LTC/BTC
In this case, what we’re not seeing is more important than what we are seeing. We are not seeing a strong reaction from the bears. The ascent is not being swiftly rejected. Participants are not using the rally to dump positions. As a result, bulls remain within striking distance.
This weak response from the bears is why LTC/BTC is a good buy on dips.
Overextended on the Shorter Time Frame
While it is certainly possible, we don’t expect Litecoin to take out the range high today. That’s because the market is flashing overbought signals on the daily chart. In addition, the candles on the daily chart are showing wicks above their body indicating that some market participants are taking profits at current levels. These technical signals tell us that Litecoin may be due for a pullback.
Daily chart of LTC/BTC
Those who have yet to enter the market may do so during this expected pullback. The target is between 0.008675 – 0.009. With the 200 MA now acting as support around 0.009, we’re confident that the retracement won’t be severe. The expected pullback will give technical indicators a chance to cool down in preparation for the swing up.
Throwback Before the Move Up
We expect Litecoin to behave just like how TRON (TRX/BTC) behaved before it broke out of consolidation. The pullback from December 8th to the 13th gave us a chance to enter the market before it broke out. When TRON broke out on December 17, it went nuts.
TRXBTC daily chart
With this expectation, we believe that now is one of the best times to buy the dips on Litecoin. The market will likely generate an inverse head and shoulders pattern before it breaks out of accumulation. When Litecoin breaches the resistance, it might be difficult to catch up without getting whipsawed. The expected pullback might be the final time to set low bids before the market runs away from us.
Resistances above 0.0098
Take out 0.0098 and the next resistance is 0.013. A move above 0.013 makes 0.015 achievable.
Those who failed to enter the market when we called the start of accumulation may do so in the following days. We expect Litecoin to go through a slight correction, which will make it a good opportunity for you to buy the dip. After this pullback, we believe that the market will likely follow the footsteps of TRON.