Trade Recommendation: Litecoin
Litecoin (LTC/USD) is coming off lows just like many altcoins. The cryptocurrency dropped to as low as $49.33 on August 14, 2018. At that point, the plummet seemed unstoppable. It’s as if bears were determined to short the market even if it was already trading in extreme oversold territory. However, bottom pickers started to enter the market just as LTC/USD was about to breach major support levels.
Technical analysis show that LTC/USD is still trading inside a large falling wedge pattern on the daily and weekly charts, but that won’t be the case for long. The market is approaching the wedge’s apex. As it does, it is also about to hit two major support levels: the parabolic support and the long-term support.
The recent bounce is affirmed by a sudden volume surge. The volume spike may not be extreme but it’s noticeable. This tells us that bulls also see the convergence of supports and they are now buying the market.
Lastly, we can see a large bullish divergence on the daily MACD. The market continues to gather strength even as the price falls.
The strategy is to buy the retest of support as close to $50 as possible. If bulls hold $50, they will likely gather the momentum they need to break out of the falling wedge and quickly climb to our target of $80.
The process may take less than a month.
Daily Chart of Litecoin/US Dollar on Coinbase
As of this writing, the Litecoin/US Dollar pair is trading at $56.05 on Coinbase.
Summary of Strategy
Buy: As close to $50 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.
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