Trade Recommendation: Litecoin
The Litecoin/Dollar (LTC/USD) pair ignited its bull run on December 8, 2017 when it took out 110 resistance. The breakout was noticed by momentum players, which pushed the price to as high as 375 on December 19. At that level, the market flashed extreme overbought readings. In addition, it grew by over 240% in just 11 days, which triggered a selling frenzy.
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As the market succumbed to profit taking, it went as low as 173.68 on December 22, but it closed at 264.98. The price action on that day created a long wick under the daily candle’s body indicating the presence of bulls at that level. As a result, the market bounced and reached 306.80 on January 6, 2018. From that point on, the pair steadily declined while its daily trading range gradually narrowed until it flashed signs of momentum on February 14.
Technical analysis reveal that the LTC/USD pair broke out of a long bullish continuation pattern yesterday when it went as high as 217.72. The price surge was accompanied by extremely heavy volume to validate the breakout. Usually, a brief consolidation period ensues after a breakout. Let’s be patient, and buy the dip.
The strategy is to buy as close to 200 as possible. After consolidating for some time, the market will most likely move up to our target of 360. The process may take a month.
Daily Chart of Litecoin/Dollar on Bitstamp
As of this writing, the Litecoin/Dollar pair is trading at 223.73 on Bitstamp.
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Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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