Litecoin's Elliot Wave Pattern Points Lower In the Short-term
Two months and a half ago, Litecoin was hovering in the vicinity of $147 a coin. The bulls seemed unstoppable after lifting the price by over 560% in six months. Unfortunately, an invisible threat was brewing under the surface.
According to the Wave Principle, a five-wave pattern, called an impulse, indicates the direction of the larger trend. As the Daily chart shows, the Litecoin price rose in a five-wave manner between $22 and $147, suggesting the bulls are still in charge.
On the other hand, before the trend could resume, every impulse is followed by a three-wave correction in the other direction. In Litecoin's case, this should be the part of the recent decline to $74, which is unfolding as a (w)-(x)-(y) double zig-zag retracement. The wave (y) is yet to be completed, so a sell-off in wave c of (y) is expected. Wave c has the potential to move down towards the blue box to test the channel supports and 78.6 fib retracement of the impulse around $52 - $45.
The good news is that once the correction is over, the trend resumes in the direction of the impulsive sequence. If this count is correct, once the short-term corrective move is completed most likely within the blue box on the chart, Litecoin looks ready for another attempt to exceed its 2019 high at $147 area.
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According to the Wave Principle, a five-wave pattern, called an impulse, indicates the direction of the larger trend. As the Daily chart shows, the Litecoin price rose in a five-wave manner between $22 and $147, suggesting the bulls are still in charge.
On the other hand, before the trend could resume, every impulse is followed by a three-wave correction in the other direction. In Litecoin's case, this should be the part of the recent decline to $74, which is unfolding as a (w)-(x)-(y) double zig-zag retracement. The wave (y) is yet to be completed, so a sell-off in wave c of (y) is expected. Wave c has the potential to move down towards the blue box to test the channel supports and 78.6 fib retracement of the impulse around $52 - $45.
The good news is that once the correction is over, the trend resumes in the direction of the impulsive sequence. If this count is correct, once the short-term corrective move is completed most likely within the blue box on the chart, Litecoin looks ready for another attempt to exceed its 2019 high at $147 area.
Thanks for reading!
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