Trade Recommendation: Litecoin
The Litecoin/US Dollar pair (LTC/BTC) started to look bearish on January 6, 2018 when it generated a lower high of $306.85. From that point, the pair has been generating a series of lower highs and lower lows expressed through three fractals of falling wedge patterns. As you can see from the chart below, LTC/BTC creates new lower highs after breakout rallies from a fractal falling wedge.
Interestingly, the market creates these falling wedge fractals while inside a large falling wedge. Recently, however, LTC/BTC broke below the support of the large falling wedge but bulls were quick to respond. This gives us reason to be bullish about the market.
Technical analysis show that the Litecoin/Us Dollar pair has turned bullish in the short-term after bulls reclaimed support of $80. The false breakout can be a strong catalyst that sends the pair to our target.
In addition, bears appear exhausted after generating two bullish pennants and one bearish flag on the third fractal. The false break actually shows exhaustion. Bears tried to push the market even lower to no avail.
Additionally, the MACD is also flashing a bullish signal as we can see a bullish cross on the daily chart.
The strategy is to buy as close to $80 support as possible. If bulls stay above this level, they will attract more momentum to send the pair to our initial target of $110. Expect heavy resistance at this level.
The process may take a month.
Daily Chart of Litecoin/Dollar on Bitfinex
As of this writing, the Litecoin/Dollar pair is trading at $84.579 on Bitfinex.
Summary of Strategy
Buy: As close to $80 as possible.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.