Comparing Litecoin Reversals - Why The Bottom Might Be In
Updated
One of my better back-to-back calls has been the move from Litecoin in 2019 all the way up towards the $130 area. Not only did I forecast this move (I did so on Reddit, not on Tradingview, unfortunately), but I even suggested that we could head all the way back to the $40-50 zone, which would have been perfectly in line with what happened in 2015. Litecoin even outperformed my forecast, heading all the way up to near $150 before correcting.
People in this market like to discount Litecoin, but the reality is that is has a lot of liquidity and has been around for quite a while. It also has at times generated far greater returns than Bitcoin ever did. Additionally, Litecoin has entered its post-halving phase. Everyone is worried about the halving's effect on Bitcoin price. A lot of these anxieties would be alleviated if Litecoin started to build a floor and move up. People in this market are asleep right now, which is understandable. Things really don't look very good. What I like to do as an analyst is figure out what's going on, even during the slow periods. Based on this analysis, I'm trying to see whether or not we can expect a continuous decline for cryptocurrencies, or whether we can expect current prices to hold.
During January-February of this past year, I used Litecoin to anticipate broader market moves. Based on Litecoin's behavior, I also anticipated a move for the market towards the 300B level, which was reached and surpassed briefly in June. Bitcoin's little cousin had a strong run up until the halving, but has completely fallen apart since then. If we compare what happened in 2015 with current price action, you can see that things look different this time around, but that there are also some striking similarities:
2015:
1) 200 day Moving Average was held on the retrace.
2) Retrace took about 6 weeks.
3) Previous bottoming period took roughly 5 months.
4) Move from bottom was roughly 900%.
5) Correction from previous bull market peak over 98% ($54 - $0.98).
2019:
1) 200 day MA was not held on the retrace. This is likely due to how long this has taken to play out, compared with 2015.
2) If this is bottom, retrace took about 5 months.
3) Previous bottoming period took only 3 months.
4) Move from bottom was roughly 700%.
5) Correction from previous bull market peak about 94% ($372 - $22).
2015 & 2019:
1) Adam & Eve bottom.
2) OBV finds higher support after the correction from the reversal pump.
3) Full retrace to main breakout point.
4) Retrace from reversal peak between 72-74%.
5) Move from bottom took about 6-7 months.
As you can see, 2015 was much more extreme in a number of ways, but took much less time to play out. What's interesting is that Litecoin looked a lot like many of the cryptocurrencies that have retraced 98% or more since the 2017 bull market. This proves that there is still a chance for some to survive. What you can also see is that if Litecoin continues to hold this horizontal level (even if it needs to move sideways for many months), this can easily become a floor, and the beginning of a long accumulation period. This may also tell us something about the broader cryptocurrency market.
Based on what happened in 2015, we may also get a short term move to the upside that can take us as high as $100, before falling back down to make a higher low. Something like this happened once the extent of the correction was reached in 2015. What we really want to see is the 200d MA eventually become support. LTC also has the 200w MA overhead, between $59-60. It needs to get back above that soon, in order to confirm massive support here.
This comparison is also important because it shows that if Litecoin heads back towards bear market lows by breaking this current support zone, things will be looking very different for the market. They're already looking quite different, since this bear market/consolidation period is taking much longer to play out. This is something I predicted as well, particularly when Bitcoin failed to hold the log uptrend channel I was looking at for much of this year. It's also important to notice the similarities. There are just as many similarities as there are differences. On-balance volume, for instance, has again made a higher floor, showing that we could actually be getting MORE market participants. This is something I've been paying more attention to recently, especially with other alts like ETH and XRP.
One thing is clear: Holding this support zone for Litecoin is extremely important. And I think it's likely to be important for the rest of the market as well.
This is not financial advice. This is just something I wanted to draw attention to, particularly for future reference. This post is meant for speculation, education, and personal use only.
Linked below are some of my favorite posts from the last year. Read if you dare! Thanks for your support!
-Victor Cobra
People in this market like to discount Litecoin, but the reality is that is has a lot of liquidity and has been around for quite a while. It also has at times generated far greater returns than Bitcoin ever did. Additionally, Litecoin has entered its post-halving phase. Everyone is worried about the halving's effect on Bitcoin price. A lot of these anxieties would be alleviated if Litecoin started to build a floor and move up. People in this market are asleep right now, which is understandable. Things really don't look very good. What I like to do as an analyst is figure out what's going on, even during the slow periods. Based on this analysis, I'm trying to see whether or not we can expect a continuous decline for cryptocurrencies, or whether we can expect current prices to hold.
During January-February of this past year, I used Litecoin to anticipate broader market moves. Based on Litecoin's behavior, I also anticipated a move for the market towards the 300B level, which was reached and surpassed briefly in June. Bitcoin's little cousin had a strong run up until the halving, but has completely fallen apart since then. If we compare what happened in 2015 with current price action, you can see that things look different this time around, but that there are also some striking similarities:
2015:
1) 200 day Moving Average was held on the retrace.
2) Retrace took about 6 weeks.
3) Previous bottoming period took roughly 5 months.
4) Move from bottom was roughly 900%.
5) Correction from previous bull market peak over 98% ($54 - $0.98).
2019:
1) 200 day MA was not held on the retrace. This is likely due to how long this has taken to play out, compared with 2015.
2) If this is bottom, retrace took about 5 months.
3) Previous bottoming period took only 3 months.
4) Move from bottom was roughly 700%.
5) Correction from previous bull market peak about 94% ($372 - $22).
2015 & 2019:
1) Adam & Eve bottom.
2) OBV finds higher support after the correction from the reversal pump.
3) Full retrace to main breakout point.
4) Retrace from reversal peak between 72-74%.
5) Move from bottom took about 6-7 months.
As you can see, 2015 was much more extreme in a number of ways, but took much less time to play out. What's interesting is that Litecoin looked a lot like many of the cryptocurrencies that have retraced 98% or more since the 2017 bull market. This proves that there is still a chance for some to survive. What you can also see is that if Litecoin continues to hold this horizontal level (even if it needs to move sideways for many months), this can easily become a floor, and the beginning of a long accumulation period. This may also tell us something about the broader cryptocurrency market.
Based on what happened in 2015, we may also get a short term move to the upside that can take us as high as $100, before falling back down to make a higher low. Something like this happened once the extent of the correction was reached in 2015. What we really want to see is the 200d MA eventually become support. LTC also has the 200w MA overhead, between $59-60. It needs to get back above that soon, in order to confirm massive support here.
This comparison is also important because it shows that if Litecoin heads back towards bear market lows by breaking this current support zone, things will be looking very different for the market. They're already looking quite different, since this bear market/consolidation period is taking much longer to play out. This is something I predicted as well, particularly when Bitcoin failed to hold the log uptrend channel I was looking at for much of this year. It's also important to notice the similarities. There are just as many similarities as there are differences. On-balance volume, for instance, has again made a higher floor, showing that we could actually be getting MORE market participants. This is something I've been paying more attention to recently, especially with other alts like ETH and XRP.
One thing is clear: Holding this support zone for Litecoin is extremely important. And I think it's likely to be important for the rest of the market as well.
This is not financial advice. This is just something I wanted to draw attention to, particularly for future reference. This post is meant for speculation, education, and personal use only.
Linked below are some of my favorite posts from the last year. Read if you dare! Thanks for your support!
-Victor Cobra
Note
Another observation: Current LTC prices are supported close to the peak from 2013. A lot of people think Bitcoin needs to test $1200 levels, but it may be enough for Litecoin to hold support here.Note
LTC is now trading below the $40-42 support zone. We're also at the bottom of a downtrend channel. It's possible we get some seller exhaustion here, but it really doesn't look very good. We're still in bear trap territory, but we'd really need a massive green candle for things to start looking bullish again, and I'm essentially talking about a 100% move in a matter of 1-2 weeks. Possible, but I wouldn't bet on it until the downtrend is cleared. I'm about to leave on vacation. I'll be back on the 28th of December. 
Note
That's not what I meant to post. Here's Litecoin: Note
Since my post, we had a nice failed low at the bottom of the channel. From here, we can maybe expect LTC to at least test the 100d MA and the top of the channel. A break above those would indicate at least medium term reversal, but let's not get ahead of ourselves. Note
Still moving sideways at major support. I think it would take a serious event to cause a further breakdown for the crypto market. Instead, a longer sideways, slow accumulation period seems more likely to me. This can last for the rest of 2020 and even into 2021. During that period, I don't really expect cryptos to make new all-time-highs, but they can get back to some higher levels again before falling back to make higher lows. For example, LTC can head all the way back above the 200d MA if it breaks the 50d MA (Around $45). Note
Update: 
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.