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Litecoin (LTC / USD) released a new annual minimum of $ 22.17 on December 14, 2018. At that point, the market was down more than 92% from last year's high of $ 304. While the market seems bearish, Litecoin could be in a point where the risk / return ratio is very favorable. After all, he was so badly beaten that fundraisers, bargain hunters and perhaps smart money investors began to take an interest.
In this article, we reveal how Litecoin could dig a fund.
Trading at accumulation levels
Before Litecoin could begin its parabolic run in November 2017, it fluctuated sideways between $ 19- $ 50 from May to August 2017. During this time, the market's interest soared. From a weekly average of 207,305 admissions in April 2017, the number has exploded to 718,584 in the first week of May 2017. The average weekly volume continued to rise until the end of August 2017, when the market printed a volume of 3,117 million Litecoin units.
This exponential increase in volume indicates that participants have begun to feel bullish on Litecoin after exceeding $ 19. If participants have shown interest in these levels before, they are likely to show interest again. So far, they are reacting as expected.
Weekly chart of LTC / USD on Coinbase
A look at the weekly chart shows that the volume started to decline significantly in January 2018. It became anemic by the end of October.
However, the volume started to rise in November 2018 when Litecoin fell below $ 50. The volume has remained relatively healthy since then. This could be an indication that the participants are once again starting to show interest at these levels.
More importantly, the increase in volume has allowed Litecoin to increase by more than 40% compared to the minimum of this year. This price action can be interpreted as a rebound from the dead cat. However, the daily chart shows otherwise, since it is forming a bullish inversion model.
Emerging reverse shoulders and shoulders structure
A review of the short period of time shows that Litecoin is struggling to close above $ 33.50. This is not surprising. $ 33.50 was a key support level.
When the participants rejected the lowest prices in September 2017, the price action inspired a parabolic run that saw Litecoin rise to $ 420 in December 2017. Now that the market is trading below $ 33 , 50, we expect it to act as a strong resistance.
Daily chart of LTC / USD
The good news is that the market is printing a reverse head and shoulders pattern in an attempt to break the resistance. The lower trim of $ 27.48 on December 27 should help the bulls cut $ 33.50. However, they will need large volumes to go beyond that level, given that bears should fight to maintain control of the market.
Proposed price
We expect Litecoin to remain in the basic construction mode while the range varies between $ 22.00 and $ 33.50. This is how to carve the bottom of the market and this vision remains valid as long as Litecoin remains above $ 22.00.
On the other hand, Litecoin could become slightly bullish as soon as it moves above $ 33.50. We remove this resistance and we could find the commercial market in a new range between $ 33.50 and $ 50.00 with an average point at $ 41.74.
Over $ 50 is where Litecoin can really become exciting as the next significant resistance is $ 100.
Litecoin support and resistance levels
If you are a breakout trader, a good time to buy is on the $ 33.50 test for support after the head and shoulders reversal. Lower binders can set bids at $ 27.72 and / or $ 22.
Bottom line
With Litecoin trading in a key price range, we believe that the participants are again interested in the market. A reverse breakout of the head and shoulders should help confirm our assumption. Otherwise, Litecoin could review our mid-range range of $ 27.72 or even $ 22.
Our point of view becomes invalid once LTC / USD is trading below $ 22.
Disclaimer: the writer has bitcoins, Ethereum and other cryptocurrencies. It holds investment positions in the currencies, but does not carry out trading activities in the short term or daily.
Featured image courtesy of Shutterstock.
