Litecoin is halving in 2 months. I'm buying hype & selling news.
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Sawcruhteez Strategies: Comprehensive Trading Strategy - Consensio | Comprehensive Trading Process | How to BUY THE DIP | Advanced Dollar Cost Averaging Methods
Consensio: Bullish
Patterns: Daily ih&s
Horizontals: R: 0.015 | S: 0.0145
Trendline:
Parabolic SAR: D: 0.0133
LTCBTCSHORTS: Shorts are at support but longs aren't overbought
TD’ Sequential: Today closed daily G3 > G2 | Weekly G2 > G1
Ichimoku Cloud: Daily is getting very close to a kumo breakout and a bullish kumo twist
Relative Strength Index: Getting overbought but still room to go on Daily
Average Directional Index: 4h needs to cool off. D still hasn't started a trend.
Bollinger Bands: Testing top of daily band | Back above weekly band
Stochastic Oscillator: Weekly buy signal
Summary: I am buying spot Litecoin and I'm also opening leveraged longs on LTC:BTC. The game plan is to hold onto both until the ratio reaches 0.022. At that point I intend to cover the LTC:BTC long and trade the spot Litecoin for BTC. I am primarily interested in this trade because of the Litecoin halving, which is scheduled to occur 10 months before the Bitcoin halving. I believe that this presents a unique opportunity and will be using the previous cycle as the primary tool for my analysis.
During the last cycle the LTC:BTC pair peaked a mere 3 days after the halving day. In this instance buying the hype and selling the news worked like a charm. I am inclined to think that the same thing will happen again.
We can draw a trendline using the low of May 24th and June 3rd which provides strong confirmation of the price and time target.
If the price respects that trendline over the next 2 months then it would take the price to the top of the bull channel at 0.026 very shortly after the LTC halving occurs. This is what is illustrated in the original chart with the first dotted maroon arrow that goes from May 24th to slightly after August 5th. At that point I would be expecting a sharp reversal which takes the exchange rate back to the bottom of the channel which waits at 0.011.
In 2015 Litecoin halved 1 year before BTC. The LTC:BTC pair started selling off immediately after the LTC halving. The selloff continued for 9 months after BTC halved. To me it makes sense that very similar action will happen again. Overall that would actually be very bullish for Litecoin. It would create a third higher high and higher low since 2017, which would illustrate LTC appreciating long term versus BTC. From a fundamental perspective I cannot understand why Litecoin would appreciate versus Bitcoin...LTC's main value proposition is faster / cheaper payments. If faster / cheaper payments was the utility of cryptocurrency then it would be doomed for failure. Services like Paypal and Venmo will always be faster and cheaper than blockchain oriented protocols.
That is because decentralization is costly and is only needed for one very important purpose: deflationary supply. The cost of decentralization is not economical for cheap / fast payments but it is entirely vital for sound money and / or a reserve currency. Bitcoin is just that and therefore has the ability to challenge the US Dollar and Gold as the preferred reserve currency. Litecoin promises cheaper and faster payments which means that it competes with Paypal and Venmo. 'Competes' is quite generous because the latter services are far superior at delivering that value prop.
In the long run (10 years +) I expect Bitcoin to out-return Litecoin by a very large margin due to the fundamentals outlined above. Nevertheless the technicals are screaming at me that Litecoin will outperform Bitcoin in short term (weeks - months). For short and medium term price movements I trust in the technicals above everything else. Therefore I am comfortable trading BTC for LTC and / or longing LTC:BTC over the next ~8 weeks. As soon as the LTC halving occurs I will be covering LTC:BTC longs and trading spot LTC for BTC.
With all that being said right now doesn't look like the best opportunity to long LTC:BTC. It is wicking of the top of the bull channel while the 4h ADX is overbought. This tells me that a minor correction is coming. A pullback to 0.014 would be a tremendous buying opportunity imo. There would be a confluence of support from the bottom of the bull channel, horizontal support and from Moving Averages.
I have already started to enter due to the Daily chart (confirmed ih&s + green 2 above green 1). However I am also expecting a small pullback to 0.014 and will be prepared to add if that happens.
Sawcruhteez Strategies: Comprehensive Trading Strategy - Consensio | Comprehensive Trading Process | How to BUY THE DIP | Advanced Dollar Cost Averaging Methods
Consensio: Bullish
Patterns: Daily ih&s
Horizontals: R: 0.015 | S: 0.0145
Trendline:
LTCBTCSHORTS: Shorts are at support but longs aren't overbought
TD’ Sequential: Today closed daily G3 > G2 | Weekly G2 > G1
Ichimoku Cloud: Daily is getting very close to a kumo breakout and a bullish kumo twist
Relative Strength Index: Getting overbought but still room to go on Daily
Average Directional Index: 4h needs to cool off. D still hasn't started a trend.
Bollinger Bands: Testing top of daily band | Back above weekly band
Stochastic Oscillator: Weekly buy signal
Summary: I am buying spot Litecoin and I'm also opening leveraged longs on LTC:BTC. The game plan is to hold onto both until the ratio reaches 0.022. At that point I intend to cover the LTC:BTC long and trade the spot Litecoin for BTC. I am primarily interested in this trade because of the Litecoin halving, which is scheduled to occur 10 months before the Bitcoin halving. I believe that this presents a unique opportunity and will be using the previous cycle as the primary tool for my analysis.
During the last cycle the LTC:BTC pair peaked a mere 3 days after the halving day. In this instance buying the hype and selling the news worked like a charm. I am inclined to think that the same thing will happen again.
We can draw a trendline using the low of May 24th and June 3rd which provides strong confirmation of the price and time target.
If the price respects that trendline over the next 2 months then it would take the price to the top of the bull channel at 0.026 very shortly after the LTC halving occurs. This is what is illustrated in the original chart with the first dotted maroon arrow that goes from May 24th to slightly after August 5th. At that point I would be expecting a sharp reversal which takes the exchange rate back to the bottom of the channel which waits at 0.011.
In 2015 Litecoin halved 1 year before BTC. The LTC:BTC pair started selling off immediately after the LTC halving. The selloff continued for 9 months after BTC halved. To me it makes sense that very similar action will happen again. Overall that would actually be very bullish for Litecoin. It would create a third higher high and higher low since 2017, which would illustrate LTC appreciating long term versus BTC. From a fundamental perspective I cannot understand why Litecoin would appreciate versus Bitcoin...LTC's main value proposition is faster / cheaper payments. If faster / cheaper payments was the utility of cryptocurrency then it would be doomed for failure. Services like Paypal and Venmo will always be faster and cheaper than blockchain oriented protocols.
That is because decentralization is costly and is only needed for one very important purpose: deflationary supply. The cost of decentralization is not economical for cheap / fast payments but it is entirely vital for sound money and / or a reserve currency. Bitcoin is just that and therefore has the ability to challenge the US Dollar and Gold as the preferred reserve currency. Litecoin promises cheaper and faster payments which means that it competes with Paypal and Venmo. 'Competes' is quite generous because the latter services are far superior at delivering that value prop.
In the long run (10 years +) I expect Bitcoin to out-return Litecoin by a very large margin due to the fundamentals outlined above. Nevertheless the technicals are screaming at me that Litecoin will outperform Bitcoin in short term (weeks - months). For short and medium term price movements I trust in the technicals above everything else. Therefore I am comfortable trading BTC for LTC and / or longing LTC:BTC over the next ~8 weeks. As soon as the LTC halving occurs I will be covering LTC:BTC longs and trading spot LTC for BTC.
With all that being said right now doesn't look like the best opportunity to long LTC:BTC. It is wicking of the top of the bull channel while the 4h ADX is overbought. This tells me that a minor correction is coming. A pullback to 0.014 would be a tremendous buying opportunity imo. There would be a confluence of support from the bottom of the bull channel, horizontal support and from Moving Averages.
I have already started to enter due to the Daily chart (confirmed ih&s + green 2 above green 1). However I am also expecting a small pullback to 0.014 and will be prepared to add if that happens.
Comment:
I had the wrong date for the LTC halving. The setup is still in tact, now I am preparing how a peak to occur before the halving. Target is 0.03.
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