In what follows, we provide an analysis of litecoin against bitcoin and the US Dollar, with a move to $175 on the cards.
From a general look at litecoin through the LTC-BTC pairing on the 4-hour chart, it’s appreciation in relation to bitcoin is notable.
Specifically, when viewing the appreciation on the 1-day chart, it’s easy to see that the last few days have rendered it somewhat resistant to the downward movement of bitcoin (note that it crashed down to $6,000 during this time span).
A major part of the reason for LTC’s gain during this period, however, can be attributed to the release of Litepay.
Posts such as the one that you see above began to proliferate heavily all around social media on February 3, 2018.
It is odd that this news came out during the time that it did, however, considering the fact that there were numerous articles that covered the launch of Litepay and announced that it would not take place until February 26, 2018.
Despite this, the overall upward trajectory of litecoin on the LTC-BTC pairing cannot be ignored.
In order to get a better idea of what the actual price of litecoin will travel to, let’s take a look at the LTC-USD paired charts.
Above is a view of the LTC-USD pairing on the 1-day chart. As you can see from the diagonal, orange trendline that was drawn, litecoin is right on the precipice of breaking the trend on the chart; which is pretty significant because this would signal a trend reversal.
Quick Review: What are Trend Reversals?
In this case, Litecoin (from the daily chart), is clearly in a downtrend . This is evidenced by the lower highs and the lower lows.
When a trend reversal does occur, then this pattern of lower highs and lower lows, will no longer be valid.
So, this now begs the question of:
Will Litecoin Successfully Break the Trend?
The best way to determine this information is to look at numerous different factors to get an idea of whether we can anticipate that the price will continue to go up over the next day or revert back to its prevailing downtrend pattern and establish a lower low than the previous one.
A simple chart analysis on the LTC-USD pairing (1-day chart) shows that the strength of the green candles has increased. Here are some good bullish indicators here:
- Three consecutive green candles (please note that at the time of writing, the last candle is not fully formed yet because the day is not over).
- The last candle has no lower shadow; so energy has been purely bull.
As can be seen from this picture, the volume has either exceeded or matched the last 20 periods (1-day periods on this chart), so the increase in activity has proven to be healthy for litecoin.
The Bollinger’s show that the price did not quite depreciate outside of the bottom of the Bollinger’s, so this isn’t necessarily a super short-term correction as dictated by the Bollinger’s Bands. More than likely, the price will at least travel to the equilibrium average (middle brown line) in the short-term.
Accumulation has remained solid on the coin as well, so no one dumped it, even during its turbulent decline in USD value. This is a very good sign, because it shows that there are a lot of strong holders for litecoin.
Unfamiliar with the accumulation/distribution indicator? Here’s a short primer:
When the line goes up, it signals greater accumulation; when it goes down, it signals greater distribution AKA dumping.
As you can see from the MACD, the MACD (blue) Line is now just barely crossing the Signal (orange) Line. However, it’s worth noting that this cross typically constitutes a buy signal.
However, the Histogram isn’t even pointing to the north yet, so no assessments about the divergence of the two lines can be made at this point.
From first glance, it may appears as though the Ichimoku for LTC-USD (1-day chart) is extremely bearish, and that presumption would not be untrue. However, a rarely noted early indicator that is associated with the Ichimoku is that the conversion line (blue line) constitutes a buy signal when it crosses under the price. In the graph above, the crossing under of the conversion line (blue line) can be observed with ease.
The Alligator, however, is a bit less optimistic for litecoin. As one can see, the price is just barely nudging that green line (lip).
Here’s a primer for all those that are unfamiliar with the Williams’ Alligator (written by the author).
The fact that the litecoin price has managed to stay above the EMA-200 on the 1-day chart is another positive development as well.
Concluding Price Direction and Setting a Target
Based on all the information available at our disposal in conjunction with the Fundamental Analysis we conducted (impending Litepay release); it’s reasonable to assume that litecoin will continue it’s trek upward into the next day if there are no very turbulent moves from bitcoin.
If it does do so, then this would signify a trend reversal. Litecoin seems determined to make sure that no daily candles close below the EMA-200, which is trending around $120 at the time of writing.
Below, are the Fibonacci levels, which will help to give a better view of future price action for litecoin.
If the momentum holds, we firmly expect that the USD price of litecoin should appreciate approximately 18 percent (From $148 to approximately $172-175).
We believe this because of the impending break in trend, which would be a major bullish signal in conjunction with the fact that the bears have been unsuccessful in pulling the litecoin below the EMA-200 or the 78.6 percent retracement level.
There is no specified time-frame for when this price action will take place. If litecoin does fail to break trend in the next day, we expect a re-test of the $120-ish mark before it finally bounces back up to $170 within the short-term. This is a more likely scenario if the direction of bitcoin faces any more dramatic moves southward in the next day or two.
We reserve comment on the longer-term price projections of litecoin at this moment.