Hi friends! Welcome to this update analysis on Litecoin! Before we dive in, I think it is important to emphasize that my analyses are all conditional. Meaning, I determine what price action must do, in order to support a move in one direction or the another. For instance, I will always posit that for (X) to occur, (A,) (B,) and (C,) are the conditions that must happen first. If you recall from my most recent posts on Litecoin, we discussed some of the conditions that must occur, for a bullish reversal to be confirmed.
We can think of this as a mathematical equation defined as X=A+B+C, where (X) represents a bullish trend reversal, (A) represents a breakout from the falling parallel channel, (B) represents a breakout above the 50 EMA in orange, and (C) represents a higher high, above the (Previous High.)
Looking at the four hour LTC chart, we can see that two of those conditions have occurred — a breakout above the descending parallel channel, and a breakout above the 50 EMA (in orange.) However, this doesn't confirm a trend reversal, so it would be wise to wait for a bit more evidence before going long. Given the fact that more resistance lies just above, at the previous high, this could end up being a failed breakout. In order for a trend reversal (X) to be confirmed, we need to see a breakout above the previous high (C.) Otherwise, the short-term downtrend is technically still intact. On the downside, a breakdown back into the falling parallel channel, or below the 200 EMA (in purple) would be a big win for the bears, and a precursor to further downside. Please follow, like, comment, and share on social media! This has been your fearless market guide, M.P.C. and I'm out!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
Hi, again great analysis and explanation. Appreciate the time taken to write these and ensure that knowledge gaps are bridged in us readers. Cheers!
I bought in yesterday, once the downward channel was broken and we bounced off the support line. I like your view on risk though. :)
Omhhh
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@OmarHalawi, Not to forget looking at the directional movement indicator, we are about to flip the trend in favour of the bulls on the 4h.
MagicPoopCannon
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@OmarHalawi, That may have been an excellent buy! Personally, in order to mitigate risk and confirm the bullish reversal, I am waiting until LTC breaks above the previous high, before buying more. Thank you for commenting, and good luck trading, Omar! =D
I bought in yesterday, once the downward channel was broken and we bounced off the support line. I like your view on risk though. :)