My crypto portfolio has been weighted more heavily towards Ethereum for this bull market so far. This has been good, since it has even outpaced Bitcoin up until this point (when measured by price increase from bear market bottom - now a 20x move, compared with Bitcoin's 15x). My entries were at $107 and $130. I trimmed my initial risk not too long ago, so at this point it's about managing my portfolio for best market performance. Sure, I could enter some DeFi projects, but that would require more careful management - something I do not have the time for at the moment, being in graduate school and essentially working full-time.
The strategy here was to reduce my Ethereum position by 23-25% today. In doing so, I have doubled my Litecoin allocation. Why? On the above charts, you can see that Litecoin has underperformed. Sure, it might continue to do so, but Grayscale has increased its LTC purchasing, and plans to do so for the rest of 2021, as far as I know. Additionally, LTC is still over 50% down from all-time high, and the LTC/ETH ratio is at an all-time low, testing the bottom of an enormous broadening wedge. It's possible the ratio never gets back to 0.5, so I plan to take profit back to ETH in stages - perhaps some at 0.2 and then more at 0.3, and save a bit in case it goes higher. This trade makes sense to me. In 2019, I converted much of the LTC I bought at $32 to ETH when the LTC/ETH ratio was close to 0.5. Buying back now, at an 80% discount, is pretty nice.
On the USD pair, LTC is juuuust sneaking its way back into the middle of the broadening wedge I've been eyeing for weeks. If this pattern breaks to the UPSIDE, it has a lot of pent-up energy, due to the wild swings within the broadening pattern. On the bearish side, LTCUD can test the bottom of the wedge, or even break down. I can also see a deeper wick against ETH. I'm prepared for something like this to happen as well. On the upside, I'm still targeting around $250 and then all-time high levels. Here's the chart zoomed in: I can also see a dump to the 100 day MA (green), currently in the low $100's.
This is just how I'm managing my own portfolio, and is not meant to be financial advice. My posts on TradingView are essentially my own trading journal. It helps to have the permanence of these posts to see whether I was right or wrong. For others, this is meant for speculation, entertainment, and education only. Please consult a professional and do your own risk assessment and research before investing. Markets are extremely volatile right now, and emotions are running high.
-Victor Cobra
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Something I forgot to mention in this analysis is of course the LTC/BTC pair, which also looks pretty horrendous, but has not made a substantial new low recently. If it can finally break out of the never-ending downtrend, that would be a good sign. But this swing trade may take a lot of patience.
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Looking at the Coinbase chart, it actually seems that LTC is having trouble getting back above the middle trendline of this broadening wedge. If it can get above, that would be a great sign. Otherwise, the lower trendline and the 100 day MA exist below as potential support.
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LTC/ETH has bounced from the trendline, as I hoped it would. However, it's far too early to tell if this is the beginning of a bigger reversal for the pair. This could take a while to play out as well.
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This bullish divergence is starting to look good, and the MA's on the 4H are aiming for bullish crosses within the next interval. Not totally convinced until price break above 0.12ish.
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Sneaky sneaky...sneaking back above my trendline. Wouldn't be surprised to see this thing go to $250+ in one quick move. Support is below at the 9d EMA (orange), around $156.
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Nice impulse and then retest of the trendline.
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The BTC pair looks like a huge multi-month bullish divergence. This could mean it has been simply under accumulation since May of last year.
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Litecoin hasn't quite made the impulse I was hoping for. It looks fairly decent against ETH here, but the LTC/BTC ratio is still confined to a strong downtrend. Currently LTC/USD is in a small triangle, which should resolve soon. It has uptrend support around $188-190, and major horizontal resistance between $220-230. If it breaks $230, it should head up to the $250 resistance.
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In order to have a larger impulse up, LTC/BTC will need to break to the upside. It must clear the major downtrend (rejected recently pretty heavily) and the 200 day MA (blue)
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Here's the short term triangle. It should resolve within the next half-day
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Broke down from the short term triangle, but if it gets back above support and clears the downtrend, LTC can start making new highs again. Current support at $203, 194, and 185.
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LTC broke the shorter term downtrend has made a new cycle high. If it can break this horizontal level against ETH, it can go to ATH pretty quickly.
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Unfortunately LTC/ETH got rejected from the previous support turned resistance, and it has also headed to new lows against Bitcoin. On Balance Volume shows that people are not interested in buying LTC with BTC right now, so the only way the ratio goes up is if whales buy in droves in a coordinated move (like what has happened before). Looking at the USD chart, LTC now has failed to hold the middle of the wedge, and could easily drop to the $120-130 range next. ALMOST got to the $250 target, but sellers were very aggressive above $225. LTC/BTC, showing declining OBV as price remains flat (bearish). LTC/USD showing the failure to hold the middle of the wedge. If LTC drops out of the wedge, it can head right back to the low $100's and then the $60 range.
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On the bullish side, if LTC can bounce quickly back above $200, that would be a great sign of strength (taking out two major levels - $185 and $194)
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This trade is really taking a lot of patience :) But selling momentum could be coming to an end over the next month or so. Here's the LTC/BTC monthly chart, where you can see that the MACD is very close to flipping green.
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I think LTC will need to hold this orange trendline in order to avoid something like my yellow scenario (or worse). If it continues to find support here, that would be a good sign. The initial bounce was pretty strong, but it looks like a retest of support needed to happen. If LTC can break above the middle blue trendline within the larger wedge, it can fly up to new highs. Feeling a bit neutral here, with stocks sliding and the Dollar trying to rebound.
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I've decided to hold this for the remainder of the cycle. Observing the chart, it seems LTC peaks against ETH as BTC also reaches a major peak.
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REKT for now. Woops. Decent chance it bounces here, at the channel support.
Haha! I thought I was the only genius doing this! Same entries as you my man. Loaded up heavy on ETH bags between 130 and 170 and at these levels have rebalanced towards pretty heavy allocation in LTC. It just makes good mathematical sense. We're at about 1000% gains on ETH and ripped through ATH while LTC (digital silver to BTC's gold) lags and still well below its ATH. A conservative assumption is LTC catches up to it's 0.02BTC status which between BTC's current and future value puts LTC between around 800-1600 in the near future.
Bottom line, another maybe 50% or so gains for ETH conservatively speaking versus ~400%-800% gains for LTC.
VictorCobra
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@BCBackerBacker, Nice! It's possible the LTC/ETH ratio continues its long term downtrend, but this looks like a good technical spot for a bounce. ETH certainly has more going for it at the moment though, so fundamentals might take over here. I think ETH can hit 2400-3000 on its next leg up, with LTC heading up to $600 and above, though it might lag initially. This would put the LTC/ETH ratio conservatively between 0.2-0.3.
-Victor Cobra
BCBackerBacker
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@VictorCobra, I totally agree with you and I plan to be out of ETH almost entirely between 2400-3000 and either go into USD or LTC depending on how the LTC/ETH ratio plays out. Interesting how your detailed and thorough technical analysis approximates with my very gestalt understanding of how this market operates. I'm also working full time and in graduate school. Are we sure you're not me from an alternate reality?
As an aside, any thoughts on PAXG? Instead of taking profits in fiat stable coins I've been allocating a stash towards this form of blockchain backed by physical gold. Paxos seems to be well established/trusted.
Thanks for your strong work!
-Bilal
VictorCobra
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@BCBackerBacker, That sounds like a reasonable plan! I love TA precisely for this reason. It's essentially a visualization of human thought and behavior over time. It's basically an opinion/sentiment tracker. So your "gestalt understanding" could really just be part of the collective unconscious that underlies broader market behavior ;)
-Victor Cobra
Shani54321
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BTC dominance is falling too. I think LTC is about to rocket
abel11
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Majestic thoughts, thank you for sharing
VincePrince
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Good idea, the indicators also matching here, thanks for sharing.
VictorCobra
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@VincePrince, Good observation. Thanks for your comment! It seems the daily MACD on LTC/USD can swing back towards the bullish side, while the weekly on LTC/ETH has some work to do. Could move up drastically on a strong reversal to the upside (obviously I made this trade BEFORE a reversal, so it's a risk). We'll see!