This trading idea might be contrary to popular belief, but thats okay with me!
Hello again everyone,
Today our focus is on Litecoin. Particularly since we see many investors, mostly inexperienced, getting over-hyped about a single downtrend resistance line being broken. And not having a higher descending resistance line, like Bitcoin does. Does that mean it's going to the moon now? I wouldn't say so just yet. This minor breakout is a good sign for the long term as it escaped from the original steep downtrend formation, not so good in the short term. We have yet to have any significant reversal resistances broken. LTC is still within a downtrend! Just in case some of you forgot, Litecoin is incredibly obedient to our good friend Bitcoin and guess what? It's still within a solid downtrend formation! What does that mean for LTC? Until BTC has definitively exited the downtrend formation, which by the way it still has a journey to get there, LTC will continually hit walls going upwards.
Long story short, LTC still obeys to the Law of Gravity that originates from Bitcoin . Meaning it can only jump so high up, without having both going in the same direction, before it goes down.
Now to get into the graph. The significant resistance lines are created from previous swing highs using the 4 hour candle sticks. Our 'Buy Zone' target for long positions are within the 80-100 strong support levels. How can we get there? This recent minor trend breakout from BTC has caused the majority of the market to experience a quick rise in price. This leads to a severe amount of smart investors capturing profits and using the following swings to maximize their investment and get into a better position at a lower price. Litecoin should still attempt to find a higher top, even if it doesn't thats okay. It will bounce at or between one of the higher theoretical resistance lines to be used as a downtrend continuation line. This cycle will continue no matter how high or low the price may go, until a confirmed reversal occurs on the cryptocurrency market indicator. Bitcoin . Until then, this trading idea will remain active.
This analysis is meant to be used only for educational purposes. Trade safely!
First Target Buy Zone (Likely): $180-140
Second Target Buy Zone (Unlikely): $140-80