Litecoin grapples with ‘double high’ dangers after LTC worth rallies 37% in November


A 37% November worth rally in Litecoin (LTC) dangers exhaustion because the “silver cryptocurrency” hints at forming a double high chart sample.

The basic bearish reversal setup seems when the value types two consecutive peaks of virtually the identical top, with every upside transfer assembly with a robust correction towards a standard assist stage, known as the “neckline.”

Sometimes, the value breaks under the assist and falls by as a lot as the utmost top between the double high’s peak and neckline.

So it seems, Litecoin is midway by way of forming a double high sample, as proven within the chart under.

LTC/USD four-hour worth chart that includes “double high” sample. Supply: TradingView

Intimately, LTC’s worth peaked out on Nov. 10 close to $295.50 — the primary high — earlier than correcting decrease towards the neckline assist of round $249. That adopted up with a rebound to $280 — the second high — finally attracting profit-takers to trigger a minor correction, which remains to be underway.

Litecoin would wish to increase its selloff to retest the neckline. In the meantime, breaking under the assist stage would activate the double high breakout setup, with the revenue goal sitting close to $200.

The Bitcoin correlation

Litecoin’s bearish reversal sample is rising when inflation in the US has surged to a three-decade excessive, prompting traders to hunt a hedge throughout numerous monetary devices.

As an example, essentially the most actively traded gold futures currently posted to its finest week in six months, leaping 2.9% to $1,868.50 per troy ounce, after the U.S. Labor Division reported a rise within the shopper worth index (CPI) by 6.2% year-over-year. That marked the fifth-straight month of inflation above 5%.

Many traders and/or merchants turned to Bitcoin (BTC) after perceiving it as a security internet in opposition to rising inflation, famous Wilfred Daye, head of Securitize Capital — the asset-management arm of Securitize Inc — admitting that folks have picked the cryptocurrency as a hedge regardless of its regarding worth volatility.

“We don’t have lengthy sufficient historical past to claim Bitcoin is certainly an inflation hedge,” Daye mentioned, including:

“I’d argue that gold is a greater inflation hedge nonetheless. However Bitcoin as an inflation hedge is a brand new attractive idea — individuals love new concepts.”

Bitcoin’s progress has additionally helped altcoins rise in tandem because of its broader affect throughout the crypto market. Litecoin has been one of many beneficiaries of the rally, with its one-year correlation effectivity with Bitcoin standing at 0.71 above zero, per knowledge collected from Cryptowatch.

LTC/USD versus BTC/USD four-hour worth chart. Supply: TradingView

In consequence, considerations over persistently larger inflation have acted as a tailwind for Litecoin good points by way of Bitcoin. That would considerably play spoilers for the bearish double high setup introduced above — and validate a bullish sample that has been lively since final weekend.

Litecoin “bull pennant” places LTC goal at $350

Dubbed a bull pennant, the bullish continuation sample seems when the value consolidates sideways inside a triangular construction after a robust rally upward. Merchants verify a bullish breakout when the value breaks above the triangle’s higher trendline with robust volumes.

Associated: Litecoin hits 6-month excessive as LTC worth soars 20% in 24 hours

In doing so, they eye the extent at size equal to the peak of the earlier uptrend (aka flagpole) as their revenue goal. In consequence, Litecoin’s worth eyes an prolonged upside transfer towards $350, as proven through the setup within the chart under.

LTC/USD 4-hour worth chart that includes bull pennant setup. Supply: TradingView

In the meantime, failing to have a decisively bullish follow-through dangers activating the double high setup. That brings the “multi-month ascending trendline assist” within the image as the following draw back goal ought to there be a bearish breakdown transfer; coincidentally, the goal can be close to $200.

The views and opinions expressed listed below are solely these of the writer and don’t essentially mirror the views of Each funding and buying and selling transfer entails threat, you must conduct your personal analysis when making a call.

Supply hyperlink

You might also like
Leave A Reply

Your email address will not be published.