LTCUSD update: Symmetrical triangle is unfolding in this market as this sector seems to be waiting for something. A catalyst is required to spark the momentum either way and it is important to determine what you will do once the market makes a choice.
Tight markets like this can be confusing and there is no reason to take new positions at this point until a break out occurs. In the case of this market the bullish breakout would be 218. Just like in BTC, this market still has a bullish bias because of the position of this consolidation relative to the bigger picture. In other words, it is in a higher low position and we know that higher lows often lead to higher highs.
The biggest mistake you can make in a situation like this is to attempt to read smaller time frames which can lead to a lot of confusion. False signals and noise are characteristic of consolidating markets. The best thing you can do is prepare for both possibilities, the break higher and the break lower.
IF the market breaks higher (higher probability), the 289 to 312 resistance area (.618 of recent bearish structure) offers a reasonable short term target. A strong catalyst is required to spark this type of move, whether is comes in the form of specific news for this coin, or a fundamental improvement for the sector. When consolidations break out and they have a strong catalyst behind them, their potential target can be measured by projecting the length of the consolidation vertically. It is an old technique, and is far from accurate, but it does provide some perspective and in this case the potential target is the 320 area.
Keep in mind this market can also break lower. Unless this coin becomes obsolete, the bearish side has much less potential, especially since there are major support levels just under the consolidation. 186 to 138 (.618 of recent bullish structure) is still in play and any retrace into this area is one that I am interested in buying, not selling. A close below the 106 low is the only scenario that would be more of a cause for concern for me.
In summary, markets like this one are not as wild as BTC, but when they move, they do move relatively quickly. It is just a matter of having the patience and the confidence to trust the road map which is still bullish. The other factor that I write about over and over is your risk tolerance. Without a clearly defined strategy for managing your risk, or accepting losses sets you up for reaction trading. This is the irrational decision making that often leads to selling bottoms and buying tops. Let the market show its hand, then take action based on a predetermined plan. My plan at this point is to wait for the next resistance area to be reached so that I can lighten up on my position. If I see any solid opportunities to add along the way, I am still open to that.
I have the feeling some Litepay news will come back around and give us the next leg up to $250-260 area very shortly...
Ronnaritta
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Totally agree
TTN-
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How much would you say Bitcoin would affect what happens next with litecoin?
cycler
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@TTN-, movement are still correlated, however btc could trade sideways leaving room for alts to move. btc down alts down, btc up alts down, btc sideways alts up. that is the relationship ATM.