Trade Recommendation: Litecoin/Ethereum

The Litecoin/Ethereum pair (LTC/ETH) confirmed its bearishness on April 7, 2018 when it failed to take out resistance of 0.30. This was a clear signal to market participants that the market is not yet ready to launch a bull run. The false break of the resistance triggered many stop losses. This sparked a bear run that saw the pair drop to 0.1682 on July 9.

The good news is LTC/ETH has quietly rallied and seems to be stepping out of bear country.

Technical analysis show that Litecoin/Ethereum has broken out of a large descending triangle pattern on the daily chart. This structure usually has a bearish bias. However, the preservation of the 0.166 support and the breach of the resistance that has stood for seven months tell us that the market is bullish.

In addition, technical indicators are showing bullish signals. The 4-day, 8-day, and 21-day moving averages acted as resistances during the recently concluded bear run. Currently, the moving averages are below the daily candle’s body and are acting as immediate support levels.

Furthermore, the daily MACD is flashing a bullish divergence and a bullish cross. This suggests that the market is gaining strength.

The strategy is to buy as close to 0.18 as possible. If bulls get to stay above this level, they are likely to inspire a rally to our initial target of 0.25. Take that out and the next target is 0.30.

The process may take more than a month.

Daily Chart of Litecoin/Ethereum on Bitfinex

As of this writing, the LTC/ETH pair is trading at 0.18316916 on Bitfinex.

Summary of Strategy

Buy: As close to 0.18 as possible.

Target: 0.25 first and then 0.30.

Stop: 0.175

 

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.