I have to make this quick, since I am already behind on coursework and it's not even halfway through the semester. This is a follow-up to my never-ending, strange attachment to Litecoin. Earlier this year, I projected all-time-high prices for LTC, but it was only able to touch the $420 price briefly before dropping like a rock. Here's that analysis:
But I like Litecoin for some reason. Maybe because it's faster and cheaper than Bitcoin, has more adoption than most, and no major regulatory concerns. It's scarce, and fungibility is coming to the network soon, which is a pretty big deal. A lot of people don't realize that crypto is VERY traceable. In fact, you can look up to see how much money any address owns. Privacy is very important if crypto is to be used (at all) like a currency. You wouldn't want someone on the receiving end of a Venmo transaction to know how much money you have in the bank, would you?
In addition to privacy, Litecoin is also (beginning) an NFT platform called Omnilite. Not that NFT's are really a Litecoin thing, but it's interesting nonetheless.
That's enough for fundamentals. This thing has been underperforming quite terribly, and is near all-time lows against Bitcoin and Ethereum. Every time I make an attempt to call a reversal on either pair, it just keeps lagging and heading lower. Nevertheless, trading volume and on-chain volume are quite healthy. And hey, at least it reached its previous all-time high this year. The retrace was very ugly, and it's probably still battered from the China mining shutdown and proof-of-work energy FUD. Yes, there are coins which are more environmentally friendly. Litecoin is the only legacy proof-of-work cryptocurrency I hold (for better or for worse).
I could be doing far worse with Litecoin. I first bought at $32 in the beginning of 2019, sold a bunch for Ethereum near 0.5 (LTC/ETH) during the 2019 halving rally, and have only begun re-accumulating this year, as I see current ratios to be more favorable for buying. My average purchase price this year is around $130.
The Plan
I think once LTC breaks this local downtrend (shown on the chart) the selling pressure will ease a bit. If Bitcoin breaks all-time-high, I'm looking to scale out of Litecoin in the red box. I don't have a specific number in mind, but if it starts getting up there I'm booking some profit. In that instance, I will also be booking profit from other crypto positions, as Litecoin tends to pump late in the cycle.
In the short term, I'd also like to see LTC break and hold above the 200 day MA (teal) and produce a golden cross. After its last daily golden cross, LTC rallied almost 1000%.
This is not financial advice! This is meant as my own personal record, and for speculation/entertainment.
-Victor Cobra
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Oops, here's the chart showing the moving averages. I removed them from the above snapshot by mistake.
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Such weak price action - couldn't even hold above the 50 day MA, but there's some support on the 4H. Until LTC gets above the 200 day MA and the downtrend, it seems sell pressure will be strong. I'd like to see strong buyers show up here, maintaining the 4H golden cross.
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Man, this downtrend.
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Weekly Ultimate Oscillator (red) for LTC/BTC is at its lowest point since 2015.
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LTC snuck out of the downtrend mostly sideways, but volume generally seems healthy. It has also sneakily turned the strong $190-195 resistance into support.
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Looks pretty good, honestly. If Bitcoin wants to grab some liquidity lower (in the mid-50k region), I can see LTC heading briefly back towards $160, but otherwise price looks very stable and ready for a large move, at least to the top of the new light blue channel.
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And look at that!
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Dayum, slow down! Might find some short term resistance as it approaches the long term orange trendline.
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Getting closer to the trendline!
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At the trendline, and we have our golden cross
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Yeesh, I expected a rejection from trendline, but not all the way back to channel support. Litecoin is so brutal, but I guess very predictable for traders!
In the mean time, ATL for ratio....its a long downtrend that needs to be broken.
VictorCobra
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@LitecoinBandit, Not quite ATL yet, but very close. It's around .003020. There's also a capitulation low on the Bitfinex chart around 0.00275 from March 2017. Interested to see if we get any meaningful price action around these levels. It actually broke one of the long term downtrends, at least on my chart (earlier this year). But now it's back below, which honestly looks pretty horrible. But usually the crypto market doesn't reach a peak when the LTC/BTC ratio is down. It usually peaks after LTC/BTC has been pumping for a couple weeks. Here are a few trendlines:
-Victor Cobra
benarni
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@VictorCobra, these LTC/BTC and LTC/ETH pairs are frightening and beautiful at the same time. LTC lost more than 90% against ETH in two years, this is crazy! I came to the two pairs when i was looking for potentially undervalued projects, and i think LTC could be one. But trading these kind of charts is dangerous. They seem virtually bottomless, and finding the perfect entry is very difficult. And because you are operating at the dark side of price discovery (in the LTC/ETH pair at least, which is more interesting to me) most of TA is not especially helpful. Still it's very intriguing to me to go LTC-long in the ETH pair. Looks like it could have already bottomed out around 0,05. If this is going to jump...
VictorCobra
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@benarni, Thanks for your comment. Yeah, I agree they seem basically bottomless. In theory, this *should* be a good time to accumulate LTC on both pairs. But the market doesn't need to do anything. LTC just may have precisely the wrong niche within the market for the current conditions - it's not a meme, it doesn't have a lot of functionality or "cool" tech....yet it's been around for 10 years with 100% uptime. Probably one of the most reliable coins out there. But that's not what matters in an emotional/speculative market. People don't want established projects. They want the NEXT established project.
-Victor Cobra
LitecoinBandit
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@VictorCobra, thats my big fear....TA worthless, depends on if people think LTC is still relevant. Based on its high usage in this market I still believe we have a great upside once BTC finishes its move to the upside and people start playing the ratio for even more gains.
benarni
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@LitecoinBandit, @VictorCobra interesting talk guys, i appreciate it. And i agree with you. There is potential! But right now i consider it as to risky to go long here. Imagine you buy LTC with ETH and the pair drops from 0.05 to 0.035. Then you would become just another bag holder for a potentially indefinite time, like the thousands of poor wretches before you... I just traded one Litecoin for a little ETH (had no LTC before). I did it for the lulz, but more for keeping my mind attached to the idea of buying litecoin. There might be a good entry when bitcoinseason is over and the alts start to pump sequentially again.
LitecoinBandit
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Great few days for LTC, would be great to see old ath and some price discovery above like eth and BTC. Seems like 1000 could be in the cards.
VictorCobra
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@LitecoinBandit, Yeah finally looks good! But it's inching closer to the problematic long term trendline for the huge channel. Let's see. I agree, that would be nice :)
-Victor Cobra
LitecoinBandit
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@VictorCobra, what are your new targets? 335 next but cycle top?
VictorCobra
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@LitecoinBandit,it’s up against the channel resistance now so could see a correction back to $237-255. But at the end of 2017 it blasted straight through the channel. In this case, I think we can see an ATH conservatively in the low 4 figures before the cycle ends. Depends on Bitcoin as well.