Litecoin Advanced Nearly 20% In Four Days
Litecoin was one of the top performers during the first-quarter cryptocurrency rebound. The coin advanced 400% from its low, set in December 2018, to its high, set just last month. Since then Litecoin has been in a major price correction and consolidation and that is now officially over.
Over the last four days Litecoin has advanced nearly 20%, most of that movement in just two days. The coin has formed a textbook Rising Three Methods Candle Pattern and that is pointing to underlying market strength. Price action over the last two months has been textbook as well, prices retreat to the 38.2% retracement level where it bounced, confirmed support, and formed the aforementioned candle pattern.
Litecoin is now above the short-term 30-day moving average where it has confirmed support. This confirmation is accompanied by a strong bullish entry signal that I think will lead to a significant increase in prices. The signal is a bullish crossover in both MACD and Stochastic that is coincident with a bounce from support, break above the moving average, and strong candle pattern.
The Rising Three Methods is one of my favorite candle patterns because it is easy to spot and usually leads to higher prices. The pattern starts out with a strong white candle followed by two smaller candle. The first candle shows a strong move higher in the market, the next two are a consolidation, kind of like a micro Bullish Flag Pattern, and the confirmed with the fourth candle. The fourth candle is also a strong white candle that closes at a new high, showing bulls are still in control after the consolidation. If this pattern is merged to form a weekly candle it becomes a single, long Marubozu Candle.
Where will Litecoin go from here. Well, the initial rally from the low in December took Litecoin up $80 or 400%. On a dollar basis it looks like the new move is likely to advance about $80 from the $70 support zone making $150 a good target in the near-term. Longer-term, the 400% rise from the lows to the recent highs, projected from the $70 support level, puts LTC near $350. This target is in line with my expectation LTC will retest its all-time highs and that may happen as soon as the end of this year.
The first major target for resistance is at $100. This is the high set last month and a confirmed low set during last years price action. Once Litecoin is able to break above this level a move to $150 will come fairly quickly I think. A touch to $150 may induce another correction or consolidation and that will be another time to get into this token. I’d be careful taking profits at the $150 level without a solid sell signal; just because it’s a possibility doesn’t mean it will happen. I’d hate to be in this trade and get out too soon. PS. I own several LTC and will be HODLing them for the foreseeable future.