Hi friends! Welcome to this update analsysis on Litecoin! Let's get right to it.
Looking at the daily LTC chart, you can see that Litecoin has broken out above the 15 EMA (in pink) which has been acting as resistance during the current downtrend. Additionally, the previous candle and the current candle are showing increasing buyer interest. The MACD is expanding to the upside, off of a second bullish divergence (green trendline) in a series of bullish divergences that has been printing for months. The bullish divergences have yet to produce a solid rally, but the fact that they are reoccurring shows that sell-side momentum has been weakening, as the bear market has progressed.
The breakout above the 15 EMA (in pink,) combined with the expanding momentum off of the bullish divergence shows that the current selloff is becoming exhausted, and we are likely entering the stages of a relief rally.
You can see that the lows from around December 25th are producing some horizontal resistance that price is currently running into (red trendline.) If LTC can close a candle above there, and hold it as support, I believe that a test of the 50 EMA (in orange) is imminent. In other words, we could see a rapid rally up to the $35 area, if support is held on the red trendline. A failure at the red trendline would likely send LTC back down to test the recent low, but that is technically now less likely than a rally.
Happy Holidays 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-
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Ps. Please excuse my makeshift downtrend channel. I was experimenting with it in my analysis, and I forgot to take it down. However, I do think that it is valid. The bottom trendline only has one touch, but I think that it is likely to produce another reaction, should the market break down to it in the future. That's assuming that we remain inside of the proposed downtrend channel.
Let's go Bulls. Let's starts a New Year on a positive note. Thanks Magic for your great work.
zigger
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poop where do you see LTC in a year ?
MagicPoopCannon
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@zigger, somewhere below $20. I think the most likely scenario is that the bear market continues to grind lower, and when it gets low enough, I think it will grind sideways for a while, possibly a few years. However, As long as the crypto use case continues to develop, I think investors will return, and a new bull market will eventually ensue. If that happens, prices will likely skyrocket to new all time highs, but we have to see the right floor develop first.
MagicPoopCannon
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@MagicPoopCannon, So, perhaps in three years, we could see LTC at $1300 or so, assuming that the next bull market can reach that high. I didn't just pull that number out of thin air either. I think that prices over $1000 are achievable, if LTC stages the right type of recovery — but like I said, I think 2019 will be a grind down in the bear market, followed by a multi-month quiet period in the market.
@MagicPoopCannon, If 1k for LTC, what is your upside for BTC at that point?
itzgaurav12345
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@MagicPoopCannon, I agree with what you said here! so true, my goal is to be patient and not jump into emotional buying LOL
MagicPoopCannon
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Ps. Please excuse my makeshift downtrend channel. I was experimenting with it in my analysis, and I forgot to take it down. However, I do think that it is valid. The bottom trendline only has one touch, but I think that it is likely to produce another reaction, should the market break down to it in the future. That's assuming that we remain inside of the proposed downtrend channel.
MagicPoopCannon
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@MagicPoopCannon, Actually, no I don't, because that would be damn near zero, and I don't think LTC is going to zero. =D
MagicPoopCannon
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@MagicPoopCannon, So, forget the bottom part of the downtrend channel. It should probably be more of a wedge, but the center line reactions is what lead me in the direction of a channel. The top trendline is valid.