A Cryptocurrency Conundrum: Tale of Two Charts
With the surging interest and prevalence of cryptocurrency in the news (ICOs, blogs, market discussions) it's not surprising to feel an urge to invest in or trade these currencies. It's a volatile market that engenders tunnel vision by speculators and investors alike when considering the potential ROIs they provide. While it's easy to imagine the disruption they can bring to every industry, I think it's important to approach them defensively. This lead me to the following curiosity.
Litecoin has done very well recently but, while I have a long outlook on this coin, deferring to technical analysis of this market goes a long way to mitigating trading hype. For this reason, I've been mulling over the best way to evaluate the leading market capitalization cryptocurrencies such as Ethereum, Litecoin, Ripple, Dash, etc.
Let's take Litecoin, for example.
Here's the LTCUSD chart:
The flat top breakout here is textbook. Huge volume on the breakout eating up the supply to ~$45 USD. Note also the comparison with BTCUSD, shown in line format in blue. The LTCUSD breakout occurred just after a significant correction in BTCUSD; perhaps indicating a move to alternative currencies such as LTC for those fearing further breakdown in BTCUSD but still an urge to stay in cryptocurrency.
$50 marks a likely strong psychological resistance level, as 2 tests of that level resulted in considerable selling pressure. In considering a level to add or enter a long position, $35 is the breakout level but with the cryptocurrency fever $40 should hold well - so a buy near here or below seems prudent.
Now let's consider the LTCBTC chart, which paints a different picture:
This chart describes a nearly 2 month long consolidation phase after running up earlier in the year, but recently breaking out and building toward 0.02 BTC,which marks a previous failed attempt at gaining market cap. relative to BTC. The 0.0145 area appear to be the prudent area for adding into demand. Furthermore, if the current levels in BTCUSD, shown below, resolve as a bear flag instead of an ascending triangle signaling further correction, the above analysis may serves as a good signal to long LTC.
While LTCUSD and LTCBTC are intrinsically tied to each other, does the ability to purchase LTC (or ETH) directly, bypassing BTC, imply there is value in considering both charts?
What do you think? Is there any significance, TA or otherwise, in considering the relative values of one of the dominant alternative coins to both BTC and USD? I'd like to read your thoughts, as I'm relatively new to these markets and certainly have much to learn about the intricacies of the technology and their interrelationships; in this way, the above analysis is somewhat narrow-minded.
Litecoin has done very well recently but, while I have a long outlook on this coin, deferring to technical analysis of this market goes a long way to mitigating trading hype. For this reason, I've been mulling over the best way to evaluate the leading market capitalization cryptocurrencies such as Ethereum, Litecoin, Ripple, Dash, etc.
Let's take Litecoin, for example.
Here's the LTCUSD chart:
The flat top breakout here is textbook. Huge volume on the breakout eating up the supply to ~$45 USD. Note also the comparison with BTCUSD, shown in line format in blue. The LTCUSD breakout occurred just after a significant correction in BTCUSD; perhaps indicating a move to alternative currencies such as LTC for those fearing further breakdown in BTCUSD but still an urge to stay in cryptocurrency.
$50 marks a likely strong psychological resistance level, as 2 tests of that level resulted in considerable selling pressure. In considering a level to add or enter a long position, $35 is the breakout level but with the cryptocurrency fever $40 should hold well - so a buy near here or below seems prudent.
Now let's consider the LTCBTC chart, which paints a different picture:
This chart describes a nearly 2 month long consolidation phase after running up earlier in the year, but recently breaking out and building toward 0.02 BTC,which marks a previous failed attempt at gaining market cap. relative to BTC. The 0.0145 area appear to be the prudent area for adding into demand. Furthermore, if the current levels in BTCUSD, shown below, resolve as a bear flag instead of an ascending triangle signaling further correction, the above analysis may serves as a good signal to long LTC.
While LTCUSD and LTCBTC are intrinsically tied to each other, does the ability to purchase LTC (or ETH) directly, bypassing BTC, imply there is value in considering both charts?
What do you think? Is there any significance, TA or otherwise, in considering the relative values of one of the dominant alternative coins to both BTC and USD? I'd like to read your thoughts, as I'm relatively new to these markets and certainly have much to learn about the intricacies of the technology and their interrelationships; in this way, the above analysis is somewhat narrow-minded.