Watch for LTC/BTC Equilibrium Pattern to Break Bullish
LTC/BTC is currently trading in a 4hr equilibrium channel. It's been ranged bound for the last 2 days and I am looking for the pattern to break within the next 2 days. Generally speaking an equilibrium pattern such as this is neutral to me but I believe there's a higher probability of a fakeout if it breaks down for the following reasons. (Hence I am going long here)
1.) LTC/BTC is trading near a multi-year low
2.) If we zoom out to the weekly we can see that LTC/BTC has been making lower highs and lower low since 2018. However, the latest weekly candle seems to suggest that it might be the beginning of a higher lower formation, which would be a very significant long-term trend reversal.
3.) The high volume of the latest weekly red candle also increases the probability that this might be final flush candle where weak hands sells out.
4.) The weekly BTC/USDT is more over extended compared to the LTC/USDT given the significance of Bitcoin's runup compared to Litecoin over the last 3 months.
With that said, the chart can very well break down and go lower as well. Especially if we see Bitcoin continues the freefall we saw this week as history shows that alts tend to take a bigger hit when Bitcoin crashes. For that reason, it's important to put a stop loss as this is anything but a sure thing. Especially in crypto land.
I am looking for at least a 15- 25% gain here if we break to the upside. Placing stop close by for a maximum loss of ~2.5%.
1.) LTC/BTC is trading near a multi-year low
2.) If we zoom out to the weekly we can see that LTC/BTC has been making lower highs and lower low since 2018. However, the latest weekly candle seems to suggest that it might be the beginning of a higher lower formation, which would be a very significant long-term trend reversal.
3.) The high volume of the latest weekly red candle also increases the probability that this might be final flush candle where weak hands sells out.
4.) The weekly BTC/USDT is more over extended compared to the LTC/USDT given the significance of Bitcoin's runup compared to Litecoin over the last 3 months.
With that said, the chart can very well break down and go lower as well. Especially if we see Bitcoin continues the freefall we saw this week as history shows that alts tend to take a bigger hit when Bitcoin crashes. For that reason, it's important to put a stop loss as this is anything but a sure thing. Especially in crypto land.
I am looking for at least a 15- 25% gain here if we break to the upside. Placing stop close by for a maximum loss of ~2.5%.
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Trade closed. Stop Loss hit taking a small loss. Though I would be inclined to take the trade again with a tight stop if it comes down more.