$LTC Double Divergence

BITFINEX:LTCBTC   Litecoin / Bitcoin

Hi friends! Welcome to Litecoin Chart Update to trading idea published on March 9.

The recent rally we've seen on $LTC which brought the price 4% higher has ignored the bearish divergence signal and may have liquidated many shorts at this point but this signal was not invalidated. Instead a double divergence appeared (as shown on the chart) as a result of the rally which means the previous bearish signal was further strengthened. Double divergence are stronger signals than a regular divergence. Relatedly the volume of the last rally was very weak which signifies a decrease in the momentum.

We are seeing two probable scenarios for $LTC long term. Both scenarios requires a correction at the 50% fib level of the entire move (see confluence between support line blue and support line black).

Scenario 1 (Green)-This scenario was derived from a possibility that $LTC is in an accumulation on an expanding channel which will be very bullish for $LTC. This could propel $LTC to 2.618 Fib extention and 3.618 Fib extension of the previous wave 1. This move will result to 80% rally from our downside target.

Scenario 2 (Blue)- This scenario works on the premise that the upside objective for $LTC has already been reached and requires a correction before the resumption of a larger bullish trend . This means that we will likely have a short bounce at 0.5 fib level before we could reach the downside target at 0.786 fib level.

IMO scenario blue is more likely to playout. That's it friends.

Share you thoughts with me in the comment section. Thanks

This is just a guide, not a trading advise.

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-Your Poop Trader
Comment: Its becoming very clear now. $LTC trend support fails.
Comment: The breakdown, support becomes resistance.
What worries me the most ist that LTCUSD pair has no divergence at all and we didn't get a weekly 50EMA rejection yet. What are your thoughts on this Pooptrader? Patience pays...
@mlok, Divergence normally don't appear but when they do, they are good signals for reversals. EMA is a lagging indicator while RSI is a leading indicator so its also normal that you already see the signal in the RSI before a moving average confirms it. Also i learned through the years to put more weight to btc as a base currency than USD. Life is easier for me that way.
mlok PoopTrader
@PoopTrader, alright then, thank you for clearing that up.
mlok PoopTrader
@PoopTrader, hey I found a similarity which occured in April 17, weekly 21 and 50 EMA cross continued with a surge in price..this cross is happening this week..what do you think about that?
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