Trade Recommendation: Litecoin
To say that Litecoin (LTC/USD) is having a rough year is an understatement. It came off lows of $22.54 on December 7, 2018. At that price point, the market was down by over 92% from the 2018 peak of $306.85. It seems that the market may have completed its cycle.
A closer look at Litecoin shows that it is now trading at a parabolic support. This means that the market came back to where it was last year before it ignited the bull run that saw Litecoin ascend to as high as $370.78 in December 2017. It appears that the market has gone from markup to distribution, and to mark down in a span of a year and a half. If our read is correct, Litecoin should be back in the accumulation stage now.
If that’s the case, now is one of the best times to bottom pick the market.
Technical analysis shows that LTC/USD may have established a short-term bottom at $22.54. We have several reasons to support this view.
First, the area of $22 is a strong weekly support level. Bears tried to breach it back in May 2017 but bulls rejected lower prices. The rejection led to the breach of resistance of $31.25 in June 2017. Litecoin never looked back until now.
Also, Litecoin printed a large bullish divergence on the 12-hour RSI. In addition, we can see that volume has come to life ever since the market touched these levels. These indications tell us that buyers are starting to scale in.
The strategy is to buy as close to $22.50 as possible. If the bulls hold this level, our targets are $26.86 and $31.25.
The process may take less than a month.
12-Hour Chart of Litecoin/US Dollar on Bitfinex
As of this writing, the Litecoin/US Dollar pair is trading at $24.01 on Bitfinex.
Summary of Strategy
Buy: As close to $22.50 as possible.
Targets: $26.86 and $31.25.
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.