Trade Recommendation: Litecoin
The unstoppable run of Bitcoin has rendered many altcoins in a state of capitulation. One coin that’s almost done with its correction is Litecoin (LTC/BTC).
It has been unraveling after putting together a strong run that saw the market go from lows of 0.009709 on February 8th to the recent high of 0.018939 on April 3rd. At that point, Litecoin was showing signs of bullish exhaustion. The daily RSI showed a bearish divergence while the daily candle showed a large wick on top of its body. These signals indicated weakening momentum plus the presence of sellers.
After spotting these signals, it didn’t take long before Litecoin started its downward spiral. Nevertheless, it is approaching a point where the market is attractive for bottom picking.
Technical analysis shows that LTC/BTC is en route to support of 0.0116. This view comes after the market breached immediate support of 0.014. Below that level, the next durable support is 0.00116.
Fortunately, 0.0116 is a reliable support level. Bulls spent about a month building a base at this level. In addition to that, Litecoin is currently in oversold territory. The expected surge in demand once the market hits the support on top of oversold conditions should be sufficient to fuel a solid bounce.
Another thing to take into account is that Bitcoin has succumbed to immediate resistance of $6,800. Money leaving Bitcoin is likely to flow back into altcoins and Litecoin is a prime candidate.
The strategy is to buy as close to 0.0116 as possible. If bulls can keep the market from falling lower, they will likely generate a rally to our targets of 0.014 and 0.019.
The process may take less than a month.
Daily Chart of Litecoin/Bitcoin on Binance
As of this writing, the Litecoin/Bitcoin pair is trading at 0.012728 on Binance.
Summary of Strategy
Buy: As close to 0.0116 as possible.
Targets: 0.014 and 0.019.
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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