This analysis is a big picture look at what is going on with Litecoin. I have only published ideas on Bitcoin so far because it's the mothership of cryptos and is a major influencer of alt coins. However, I'm a big fan of LItecoin and thought it would be fun to post an analysis while the crypto market has been in a lull for the past few days. So without further ado, let's get to it!
Support and Resistance
On the daily chart (Log) I have identified the support and resistance levels. As you can see, I have outlined the major downtrend "line in the sand" (Black line). This trend line has held for the past year and appears to be an impenetrable wall in this bear market. I am looking for this trend line to be decisively broken to identify a possible bottom, but until that happens there is no reason to believe that this bear market is over. The 50 day EMA (in Pink) is also acting as resistance and is an indicator that I am paying close attention to. IMO, if Litecoin can break above the 50 day EMA and turn it into support, that would signal bullish momentum and a major trend change. Any breaks above this level so far have not lasted long and resulted in a quick sell off.
The gray line identifies the yearly support just over $48, which is likely to turn into resistance should the price start moving up toward that level. Many people were expecting that level to be tested after the inverse head and shoulders pattern seemed to be breaking out, however the yearly trend line is just too strong at the moment. I have also outlined important support levels for Litecoin (in Blue) from past price patterns. These are going to be the levels to watch going forward if we see further price decline.
Final Thoughts
Overall, this is a powerful bear market and we have no reason to believe that Litecoin is bullish at all until the technical trend changes. As I said in the beginning, Bitcoin is the major influencer in this market and IMO Bitcoin hasn't seen a capitulation event or technical trend change to signal that this bear market is over quite yet. Since I believe that Bitcoin is likely to see another sell off and a true capitulation event, I am expecting Litecoin to follow. That being said, I believe in cryptos long term and I do think these are great prices, but until there is a technical trend change I am prepared for prices to continue lower.
*This is not financial advice. For entertainment and educational purposes only.
-Brad
Support and Resistance
On the daily chart (Log) I have identified the support and resistance levels. As you can see, I have outlined the major downtrend "line in the sand" (Black line). This trend line has held for the past year and appears to be an impenetrable wall in this bear market. I am looking for this trend line to be decisively broken to identify a possible bottom, but until that happens there is no reason to believe that this bear market is over. The 50 day EMA (in Pink) is also acting as resistance and is an indicator that I am paying close attention to. IMO, if Litecoin can break above the 50 day EMA and turn it into support, that would signal bullish momentum and a major trend change. Any breaks above this level so far have not lasted long and resulted in a quick sell off.
The gray line identifies the yearly support just over $48, which is likely to turn into resistance should the price start moving up toward that level. Many people were expecting that level to be tested after the inverse head and shoulders pattern seemed to be breaking out, however the yearly trend line is just too strong at the moment. I have also outlined important support levels for Litecoin (in Blue) from past price patterns. These are going to be the levels to watch going forward if we see further price decline.
Final Thoughts
Overall, this is a powerful bear market and we have no reason to believe that Litecoin is bullish at all until the technical trend changes. As I said in the beginning, Bitcoin is the major influencer in this market and IMO Bitcoin hasn't seen a capitulation event or technical trend change to signal that this bear market is over quite yet. Since I believe that Bitcoin is likely to see another sell off and a true capitulation event, I am expecting Litecoin to follow. That being said, I believe in cryptos long term and I do think these are great prices, but until there is a technical trend change I am prepared for prices to continue lower.
*This is not financial advice. For entertainment and educational purposes only.
-Brad
