LTCUSD Update: While these markets slowly retrace, this market is following as expected, and I wanted to point out some important levels to consider as the price action unfolds.
First let's begin with the 55 level which is the .382 of the broad bearish swing. This level is the current resistance that is keeping this market in the low 50s. The fact that price has formed a double top and is still in the process of retracing is certainly a sign of weakness which makes sense in a generally weak BTC environment.
What is interesting is the 50 support level which it has retested a second time and retracing higher. This double bottom formation is the kind that offers opportunities on smaller time frames. If this double bottom holds, price action will have established a higher low as well (relative to the 44 low.). The minor lower high at 52 will have to be taken out in order to confirm the double bottom.
So what does this mean? This pair is building a bullish structure, in the face of a somewhat weak BTC. BTC and the alt coins are slowly selling, but it is not overly bearish, especially since the 4104 level has still not been taken out. If that market manages to to hold up, this market is more likely to push higher because it is acting relatively strong. Even if the 50 level breaks, it still has the 49 to 47 support area (.618 of recent bullish swing) to get through as well. A lower high (55 to 57 area) should lead to a lower low, and if the new low fails to unfold, it is reasonable to take that as a sign of strength.
Keep in mind I am not saying this market WILL fail to make a lower low, I am just sharing how I will interpret this price action IF it does. In that scenario I would also expect to see a more bullish price action in BTC as well.
To make it clear, these markets are still too risky for any swing trade longs, so I do not intend to take any, BUT if price action starts showing clear signs of bullish momentum on the bigger picture, I will be looking for an opportunity to open a swing trade in this market. It is certainly worth keeping on your radar.
In summary, I am seeing relatively bullish structure forming in this market while the other markets contend with bearish price action. This hidden strength can lead to higher prices if BTC manages to push through it's major 4550 resistance zone. In a bullish scenario, if the 57 level is taken out, this pair is one I would consider buying on a subsequent retrace. Of course IF BTC falls apart, which is what I have been anticipating, the only buying I will do is at the extreme lows (if these marekts offer such an opportunity, which again is not a swing trade). Overall, this market is certainly one worth keeping an eye on as we wait for BTC to choose which way it wants to go.
Interesting perspective. Thank you for your detailed explanations as always @MarcPMarkets
MarcPMarkets
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@giwook, you're welcome. It's funny people ask for me this one and when I post it, I get much less views. Hehe.
An0nym0us
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@MarcPMarkets, some traders are perpetually bearish when it comes to LTC because it laid dormant for so long. Charlie Lee's return lit a fire under the chicken's arse though. :p I like it as an investment for the strong fundamentals and I like it for trading because it often experiences large swings. They were much more predictable over the summer, but LTC still has my attention. Thanks for the TA.
Silver-Collector
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Thanks for the Litecoin TA!
MarcPMarkets
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@Silver-Collector, hehe you're welcome. I am glad some people appreciate it. Compared to my other analysis, this one gets much less views. Hehe.
If this market drops to a lower low... where do you anticipate that to be? What resistant levels will you be looking at for possible reversal? 47-49 zone?
If it FAIL to make a lower low, and possibly do a double bottoms... what signal will you be watching for you for open a swing trade?
Thank you Marc!!! Top analyst here
MarcPMarkets
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@EtherSwinger, even though price popped nicely off of 50, since I am swing trading, I cannot justify taking any risk because of the BTC price action. I could be wrong, but I would rather be out, than stuck. So I am going to wait to see if BTC sells off, then I can reevaluate this market.