Litecoin Analysis For Roger's Sister-in-Law & Errbody Else!
I'm dedicating this chart to my friend Roger's sister-in-law, who I hear is an investor and LTC enthusiast. For her, and the other long-term LTC investors out there, here is my big-picture view of Litecoin.
On the weekly LTC chart, we can see that price is currently in a clear symmetrical triangle (in black.) For those who are unaware, symmetrical triangles are "continuation patterns." That means, they generally produce a continuation of the move from which they began. In this case, the move was CLEARLY to the upside, after LTC broke out of a similar symmetrical triangle in 2017 — just before it's historic run to all time highs.
I have seen a lot of symmetrical triangles, and I have studied them greatly. A couple key things to note about them, is that they usually breakout sometime within the last quarter of the formation. Also, they can somewhat commonly produce false breakouts. What that means, is you could see a symmetrical triangle that (in this case) breaks to the downside, causing a lot of selling, but then recovers into the formation to ultimately produce a sustained breakout to the upside. Another thing to know about symmetrical triangles, is they tend to return to the apex of the triangle to define it as support or resistance. Those qualities aren't very obvious with the first example on the left side of this chart, but I can assure you that they are common qualities of symmetrical triangles.
Looking at the MACD, we can see that it's currently trying to roll over to the downside, as it interacts with the zero line. This is actually a sign of weakness. When the zero line on the MACD acts as resistance, it can project a loss in bullish momentum on the chart. What's interesting, is that LTC has been below the zero line on the MACD for six months. I know you can't really make it out on this chart, but when we look at the MACD during the same period in the first symmetrical triangle, we can see that it was never below the zero line. In fact, it held support on the zero line and stayed above it consistently from June 2015.
With all of that said, just because a symmetrical triangle is typically a "continuation pattern" doesn't mean that it will always act as a continuation pattern. No pattern works 100% of the time. And with the weakness that we're seeing in momentum compared to 2017, it's important to remember that nothing is certain. So, the key takeaway here is that we need to watch for an upside breakout of this symmetrical triangle.
Another good indicator to watch is the RSI. We can see that during the progression of the first symmetrical triangle, the RSI found support above the 43 level, and never dropped below it. At the moment, the weekly RSI is above that level (red horizontal trendline.) However, if we see the RSI fall below that level, especially if it were coupled with a breakdown of the current symmetrical triangle, it would be a clear sign of weakness that is very different from what was seen leading into 2017. One last thing, it's also worth noting that the Gaussian Channel has turned red again, inside of the triangle. While this isn't a huge deal at the moment, it is a bit different than 2017, and it looks a bit weaker.
So, that's my current view on LTC. Good luck everyone.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
On the weekly LTC chart, we can see that price is currently in a clear symmetrical triangle (in black.) For those who are unaware, symmetrical triangles are "continuation patterns." That means, they generally produce a continuation of the move from which they began. In this case, the move was CLEARLY to the upside, after LTC broke out of a similar symmetrical triangle in 2017 — just before it's historic run to all time highs.
I have seen a lot of symmetrical triangles, and I have studied them greatly. A couple key things to note about them, is that they usually breakout sometime within the last quarter of the formation. Also, they can somewhat commonly produce false breakouts. What that means, is you could see a symmetrical triangle that (in this case) breaks to the downside, causing a lot of selling, but then recovers into the formation to ultimately produce a sustained breakout to the upside. Another thing to know about symmetrical triangles, is they tend to return to the apex of the triangle to define it as support or resistance. Those qualities aren't very obvious with the first example on the left side of this chart, but I can assure you that they are common qualities of symmetrical triangles.
Looking at the MACD, we can see that it's currently trying to roll over to the downside, as it interacts with the zero line. This is actually a sign of weakness. When the zero line on the MACD acts as resistance, it can project a loss in bullish momentum on the chart. What's interesting, is that LTC has been below the zero line on the MACD for six months. I know you can't really make it out on this chart, but when we look at the MACD during the same period in the first symmetrical triangle, we can see that it was never below the zero line. In fact, it held support on the zero line and stayed above it consistently from June 2015.
With all of that said, just because a symmetrical triangle is typically a "continuation pattern" doesn't mean that it will always act as a continuation pattern. No pattern works 100% of the time. And with the weakness that we're seeing in momentum compared to 2017, it's important to remember that nothing is certain. So, the key takeaway here is that we need to watch for an upside breakout of this symmetrical triangle.
Another good indicator to watch is the RSI. We can see that during the progression of the first symmetrical triangle, the RSI found support above the 43 level, and never dropped below it. At the moment, the weekly RSI is above that level (red horizontal trendline.) However, if we see the RSI fall below that level, especially if it were coupled with a breakdown of the current symmetrical triangle, it would be a clear sign of weakness that is very different from what was seen leading into 2017. One last thing, it's also worth noting that the Gaussian Channel has turned red again, inside of the triangle. While this isn't a huge deal at the moment, it is a bit different than 2017, and it looks a bit weaker.
So, that's my current view on LTC. Good luck everyone.
I'm The Master of The Charts, The Professor, The Legend, The King, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-