Whats up traders, I hope you are all having a good weekend.
Here we have LTC/USD on the 4H chart.
Recently, price has been in a strong up move. Price has a lot of momentum to the upside at the moment.. On the 4H chart, it is clear that price will eventually correct.
*Disclaimer* I am in no way implying that price will correct from current levels. I am merely showing where the likely correction areas will be when it does correct.
Despite price having a big bull run, eventually it will be time to correct. I believe that price will eventually stall to one of two levels. I have considered these areas since they are: Of structure, and, they are to be reasonable expected areas of correction based on technicals on the chart.
This trade could play out in 2 ways, I have outlined them below
-When price is ready to correct, it will go to the downside, and seek out the sideways resistance turned support channel at 210.
-When price is ready to correct, it seeks a larger correction to the downside, approaching the first major structure that LTC/USD has ever seen, at around 155.
Bare in mind that I am an enthusiastic bull with Litecoin. I am merely pointing out possible correction levels that Litecoin will depend on when price lacks momentum.
There is a lot of fundamentals behind Litecoin that I really like, and when I am ready with my next analysis I will be going into the fundamental logic of this trade in more detail.
I will update this analysis as the trade progresses.
In the related ideas, I have posted my other ideas. Please like my other content.
Great analysis from technical perspective but it seems the price is being pushed up by news, so you can gamble, and you will either profit or lose big time. If you follow TA you could still profit or lose but at least it will be an educated trade where you have done your homework and managed your risk
TomProTrader
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@isaeed, Technicals are an afterthought. When news is out, technicals then come into play to find and represent current value. "Value"
Agree with you.
volkergu
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I agree with that from a technical perspective a correction should come; but the only way I can explain the crazy up move is that more and more new money comes into play, meaning more people move from fiat and other cryptos into LTC; and if that carries on then it should just move further; I gave up predicting any top; question is, when people start to believe LTC is too expensive; any thoughts on this?
TomProTrader
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@volkergu, Also to support your idea, is that people can exchange to LTC as it is rather liquid compared to competitors and then use the network fee free. People might catch on soon that Bitcoin fees on miner are continually rising, so Litecoin at this second in time, is really cheap!. I wouldn't be surprised if Litecoin made it into the thousands. Another thing to bare in mind is, is that Litecoin is basically the Silver to Bitcoin so the value should be a bit more correspondent.
There is now futures, so people will also be looking to immediately diversify across other coins (And which better than the second best reputable coin to Bitcoin)
Now that Bitcoin is public, Litecoin is the next one in line. I believe it has great potential (And will behave like a normal trender!)
nixel
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@volkergu,
There is a point where everyone wants to buy litecoin already owns it. Then no matter how expensive is litecoin, when no new buyers are available, the price should drop very fast.
This is fundamental rule.
volkergu
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@nixel, no argument on this; the basic psychology which TA is based on as in the normal stock exchange is certainly the same; but I believe the mental hurdle of starting to invest in stocks is still bigger than now the access to crypto; therefore a lot more people will go into it; especially with FB; and this will determine how high; but it seems that we have reached a little bit a more stable level and correcting downward
Buzzligh1year
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Almost thought this would be the big vomit, huge correction taking place, but perhaps it will still continue. Loading up on the way down here. I think people will be turned off from buying at the moment and out of no where, volume picks up, prices rocket, and then FOMO kicks in
TomProTrader
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@Buzzligh1year, Precisely. Buying now makes no sense. There is no support, no technicals, nothing. It's just a "market noise" area, usually where novices make trades.