Trade Recommendation: Litecoin
Litecoin (LTC/BTC) printed a fresh 2018 low of 0.007055 on November 19, 2018. At that price level, the market was down by more than 71% from the 2018 peak of 0.025. Nevertheless, participants rejected lower prices and brought the November 19 daily close up to 0.007412. This price action was bullish. It showed that buyers were ready to step in at these levels.
With bulls making their stand, Litecoin rallied. It climbed as high as 0.008398 on November 28. While this was nothing but a dead cat bounce, Litecoin bulls now have the opportunity to make a statement and establish a clear bottom.
Technical analysis shows that LTC/BTC bulls and bears are struggling to control 0.0074. This level is the market’s parabolic support. If you look at the weekly chart, you will see that Litecoin started its parabolic run after establishing 0.0074 as support in November 2017.
In addition, the weekly RSI just printed a bullish divergence at near oversold conditions. Also, the market continues to fall on thin volume. These signals tell us that sellers are showing signs of exhaustion and bulls are slowly gathering the momentum for the next bounce.
The strategy is to buy as close to 0.0072 as possible. We’ll buy below the weekly support to help us avoid liquidations. The entire crypto market is volatile so it pays to buy closer to the yearly bottom.
If LTC/BTC doesn’t go below 0.007055, then we’ll likely see the formation of a double bottom pattern on the daily and 4-hour charts. This might be enough to inspire bulls to rally to our targets of 0.0083 and 0.00915.
The process may take a month.
4-hour Chart of Litecoin/Bitcoin on Binance
As of this writing, the Litecoin/Bitcoin pair is trading at 0.007354 on Binance.
Summary of Strategy
Buy: As close to 0.0072 as possible.
Targets: 0.0083 and 0.00915.
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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