Litecoin (LTC) is the second cryptocurrency to ever be created after Bitcoin, a replica made by the Chinese.
Litecoin is very famous and is available on all major exchanges and accepted by many Bitcoin payment platforms like Coinbase.
At the time of this writing, Litecoin is the #6 biggest Cryptocurrency in the world with 10.7 Billions market capitalization. When trading, Litecoin is very resilient to price swings. I would like to trade this coin for long…
Let’s look at some news first, the reason why I am sharing this Litecoin analysis.
Exciting news are coming for Litecoin in February, which can be great for the price of this altcoin. The main development to come is called LitePay, a payment platform, here are some quick details about it:
Payment platform LitePay is on track for its planned February launch and aims to bridge the gap between Litecoin and fiat currency.
LitePay aims to make it easier:
- For businesses to accept Litecoin as payment
- To settle Litecoin payments directly with banks
- To manage Litecoin finances all in one place through the open source Litepay mobile and desktop wallet
It also plans to create a LitePay card, to let users load dollars into their Litecoin wallet without any fees, and use it at ATMs, merchants and anywhere else VISA cards are accepted. (source)
This can be really good, and hardly can do any harm to Litecoin, so we are going to use this as one of our indicators that Litecoin’s price can be going up in the close future.
Litecoin (LTC) Technical Analysis
Now, this is not the type of trade that we normally join. We join at the bottom to sell at the top. We look for coins that are yet to take off, no bull run yet, maybe just a small breakout, buy them and ride the entire wave. Litecoin’s bull run started on the 7th December after bouncing from a strong bottom, it can go down hard again, so please be careful with this trade.
First let’s look at the daily chart, the basis for our analysis. I will explain this chart as all the lines can make it confusing, so just glance over it for your learning and entertainment:
You can find the following features on the chart above:
- The blue sideways channel: This is our primary channel and our main indicator for this trade.
- EMA30 & EMA90: These serve as possible support level markers. Where you see these lines, blue and purple, support can be found there. If broken, then you know that the price can go lower easily.
- Red line: Small descending trend line. Mild resistance, the stronger resistance is the blue horrible line that is the top of the sideways channel.
- Green lines: Ascending trend line. Mild support, these lines represent possible supports and ascending pathways.
- Note: Both the red and green lines can be broken straight and the price continue sideways, but they work as reference for a possible path that the price might follow.
- Vertical purple lines. Expected LitePay momentum build up and when the red and green trendlines meet. These are possible breakout days depending on how the trade develops.
- Litecoin is moving sideways. If the resistance lines are broken the price is expected to go up. If the support lines are broken the price is expected to go down.
- The indicators are flat.
When to buy in?
This is a more advanced trade than what we normally do. You have many different options for your buy in. I will tell you what people normally do:
- You can wait to see if Litecoin is going to hit the lower end of our channel to buy in. This is a good way to maximize potential profits.
- You can wait until Litecoin breaks resistance and breaks the current trend, buy right above the resistance to secure the bull ride and reduce waiting time. You can use a stop-loss in case the price goes back down.
- Buy in now within a range with a stop loss. We normally use this third option, we buy and hold. Other people stay on the outside and buy when the action has been confirmed. For this type of set up, I rather buy and hold, just like our long term trades but everybody is free to choose what fits them best.
For now I do not recommend any buy in. I would rather track this coin and see how it develops.
I myself buy and sell a lot of Litecoin, but with this LitePay news I feel like holding long and see how it goes. If you want to trade this coin.
I will be providing more instructions soon, for now, let’s just track the charts.