Litecoin/Bitcoin: Cup and Handle Or Double Top
Currently, Litecoin/Bitcoin looks like it could either be a cup and handle or a double top, in this idea, I will represent both possibilities.
The Cup and Handle:
In yellow, the cup and handle can be seen with the resistance at 17752 satoshis, it has a price objective of approximately 24908 satoshis derived by measuring the height of the cup. The to the handle resistance and the handle is noted by the yellow diagonal line. Although this looks very similar to a cup and handle pattern, this has strong reason not to be: first, the volume is highest at the bottom of the cup, where in a standard cup and handle, the volume is suppose to decrease as price decreases this is circled in light blue. Since volume is such an important factor to determining patterns, in most situations I would then assume the pattern is not valid, however, Litecoin has been one of the strongest cryptos so its possible for it to retest the neckline.
The Double top:
The bearish situations are represented by the purple lines, and it can follow the appropriate direction by retesting the resistance of the cup and handle by failing to cross it or it can drop from this point on. The volume better fits this, because there was a large rejection on the right side (the second attempt to drive through the high). However, it is also important to note that this is near historical resistance.
Given that there is bullish news, it is possible that Litecoin will see the rally of the cup and handle, as for the moment, I am neutral on both outcomes. In addition, it is possible that this is a harmonic pattern, however, harmonic patterns are something that I need more time to develop.
The Cup and Handle:
In yellow, the cup and handle can be seen with the resistance at 17752 satoshis, it has a price objective of approximately 24908 satoshis derived by measuring the height of the cup. The to the handle resistance and the handle is noted by the yellow diagonal line. Although this looks very similar to a cup and handle pattern, this has strong reason not to be: first, the volume is highest at the bottom of the cup, where in a standard cup and handle, the volume is suppose to decrease as price decreases this is circled in light blue. Since volume is such an important factor to determining patterns, in most situations I would then assume the pattern is not valid, however, Litecoin has been one of the strongest cryptos so its possible for it to retest the neckline.
The Double top:
The bearish situations are represented by the purple lines, and it can follow the appropriate direction by retesting the resistance of the cup and handle by failing to cross it or it can drop from this point on. The volume better fits this, because there was a large rejection on the right side (the second attempt to drive through the high). However, it is also important to note that this is near historical resistance.
Given that there is bullish news, it is possible that Litecoin will see the rally of the cup and handle, as for the moment, I am neutral on both outcomes. In addition, it is possible that this is a harmonic pattern, however, harmonic patterns are something that I need more time to develop.
The confirmation of this bearish pattern for me would be if this weekly candle closes below the last weekly candles open. This would be known as a bearish engulfing candle, which does signify a reversal at the weekly level.