Trade Recommendation: Litecoin (LTC)
Our May 11, 2019 trade recommendation for Litecoin/Bitcoin (LTC/BTC) hit its initial target. On June 6th, the cryptocurrency rose to as high as 0.014512. Those who followed the trade recommendation grew their investments by over 25 percent in less than a month.
We were hoping that Litecoin would at least tap our second target of 0.019. However, the crypto token succumbed to profit-taking before the target was hit. Thus, the market formed a bearish lower high setup. This was enough for savvy market participants to dump their positions as the price action indicated bullish exhaustion.
True enough, Litecoin unraveled. It nosedived to a fresh 2019 low of 0.006915 on August 20th. The good news is that a bounce appears to be on the horizon. This is the reason why we’re interested in this market.
Technical analysis shows that LTC/BTC bulls are defending support of 0.007. Even though bears breached this level on August 20th, bulls quickly recovered the support today, August 21st. The price action tells us that buyers are showing interest at current levels.
In addition to that, the market is forming a large falling wedge on the daily chart. We believe that a break to the upside is very likely due to the following reasons.
First, Litecoin is undervalued as the daily RSI is trading close to oversold territory. On top of that, we can see a bullish divergence forming. These signals tell us two things: we can expect selling relief and momentum is swinging to the side of the bulls.
Lastly, volume has been very thin as of late. This supports our view that selling pressure is easing. With the market trading at a strong support level, we have the right conditions that can ignite a strong bounce.
The strategy is to buy as close to 0.007 as possible. If bulls can keep the market from falling lower, they will likely generate a rally to our targets of 0.0085 and 0.01.
The process may take less than a month.
Daily Chart of Litecoin/Bitcoin on Binance
Summary of Strategy
Buy: As close to 0.007 as possible.
Targets: 0.0085 and 0.01.
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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