Trade Recommendation: Litecoin

Our February 9, 2019 trade recommendation for Litecoin (LTC/USD) hit the target. Those who followed the trade recommendation grew their investments by up to 92% when Litecoin climbed as high as $79.667 on April 2nd.

While Litecoin exceeded our target, we’re happy to take profits because at that point, the market was starting to show signs bullish exhaustion. On April 3rd, the daily candle had a long wick on top of its body to indicate the emergence of sellers. In addition, Litecoin was already in extreme overbought territory. The overheated technical indicator suggests that a correction was in order. And, that’s what we’re getting now.

With this pullback, we have an opportunity to buy the dip.

Technical analysis shows that LTC/USD is enroute to support of $67. We have this view after the market breached immediate support of $75. This move signalled the need for a deeper retracement.

The support at $67 is a very good spot for bulls to make a stand. After all, bulls tapped this price area as resistance from September 2018 to April 2019 before taking it out on April 2nd. Now that the market is correcting, a successful retest of this former resistance as support is bullish. This will help in keeping Litecoin’s uptrend healthy.

The strategy is to buy on dips as close to $67 as possible. If bulls hold this level, our initial target is $100. Take that out and the next target is $132.

The process may take a month.

Daily Chart of Litecoin/US Dollar on Bitfinex

As of this writing, the Litecoin/US Dollar pair is trading at $72.743 on Bitfinex.

Summary of Strategy

Buy: As close to $67 as possible.

Target: $100 and then $132.

Stop: $64

 

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.

Kiril is a CFA Charterholder and financial professional with 5+ years of experience in financial writing, analysis and product ownership. He has passed all three CFA exams on first attempt and has a bachelor's degree with a specialty in finance. Kiril’s current focus is on cryptocurrencies and funds, as he does his own crypto research and is a Product Manager at Mitre Media. He also has his personal website, InvestorAcademy.org where he teaches people about the basics of investing. His ultimate goal is to help people with limited knowledge of finance and investments to create investment portfolios easily, and in line with their unique circumstances.