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.
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.