Here then is a nice four hour chart of that spread (LTC/BTC) going back to last fall. Needless to say, it has been a very tough past six months for the bulls. A market is defined simply as lower highs and lower lows and that is basically what has transpired; especially so since the failure of the winter trading range lows at .02124. The sky's did brighten a bit through the end of May as it looked like a capitulation bottom had been formed. After a two week consolidation, bull's hearts where broken once again as we have now broken through the bottom of that range. Price has now reached the original that started the meteoric rise late last November and the bulls are left to ponder if this old significant level is 'the bottom'. Unfortunately, until we stop making new lows and start making new relative highs, I can't make the case here. Indeed, with the recent failure of the top of the original (.1625) three very real downside targets present themselves.
1. BoT target .01354
2. Gap at .00913
3. 200% extension of the winter trading range failure: .00716
So what can we infer from this rather negative outlook? Here are a few of my thoughts: While attractive, there is no long trade on this spread at the moment. One could argue that "BoT' setups (a way to play price patterns) are perfectly realistic into stated downside targets. Until we start to see a pattern of higher highs and higher lows, bulls must sit and wait.
Cheers all and hope it helps
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