An explosive move is brewing for Litecoin; one which could see the OG cryptocurrency move to the top three spot by market capitalisation, where it belongs.
In this issue:
- Bitcoin update
- Litecoin analysis
- Reality over fantasy
- Latest happenings
- Listening material
Bitcoin is exchanging hands at $29,150 after falling 4% on Monday, outside the local trading range. Provided intra-day price-action remains below $30,000, the odds of testing the 20-weekly EMA ($27,800) are high. Given that no major shifts have taken place over the week, last week’s analysis and levels apply.
Litecoin/Dollar has entered a goldilocks zone which is unlikely to last long as the market wises up to the technical value proposition. Besides the compounding fundamental data, LTC/USD has registered two technical reversal signals at long-term support, such that current data points to multi-timeframe confluence for a robust reversal. When it happens, as I’m convinced it will, the move is unlikely to be short-lived, but a transition into a new paradigm for Litecoin.
Locally, while LTC/USD has registered a technical ‘deviation’ above $100 and currently approaches mid-range ($80), this price-action is in-keeping with Litecoin’s volatile history. The general rule is to expect LTC/USD volatility to be a multiplier of BTC/USD volatility, and this evidence-based assumption is generally accurate. In other words, explosive moves come with the asset. This makes sense considering Litecoin’s modest market capitalisation of $6.5 billion (which is likely to move closer to $140 billion under current valuations due to the BTC-LTC Gold-Silver relationship). With this consideration, strict level-to-level plays may be less effective than one might expect.
The same cannot be said for forward-looking reversal indicators. Specifically, Litecoin/Dollar has registered a reversal signal on the TD-sequential indicator (H48). By the end of the day, price will likely register a TD-9 reversal. TD sequential is a powerful forward-looking technical tool that’s used to forecast trend reversals for tradeable assets, best used alongside a basket of indicators.
Zooming in on lower time-frames (H4), LTC/USD has traversed in a falling-wedge structure; another reversal pattern. While, higher-time frame considerations are more reliable, LTF confluence is still noteworthy. Short-term liquidity considerations (limit orders, stop-losses, etc.) suggest that a wick into mid-range ($80) could unfold, testing buyer conviction at the origin of the impulsive move. This shouldn’t come as a surprise if it happens and to my mind will mark the final 2-digit bottom ever for the asset’s lifetime. On the flip-side, losing mid-range on a weekly time-frame would open the door to $65, invalidating this technical analysis in the process.
That being said, these technical data points suggest that Litecoin is in a goldilocks zone for a limited time. High-time frame liquidity rests above $140 and there is limited downside opportunity, if any. Seen within Litecoin’s fundamental context and extraordinary value proposition, it doesn’t take much imagination to intuit how price-movements into high-time-frame liquidity could be akin to the falling of small stones that start an avalanche. Bear in mind that Litecoin has been in accumulation mode since May 2022, setting higher lows and higher highs in its typically volatile and convoluted fashion.
Reality over fantasy
In recent history, sleeping on Bitcoin was a mistake after March 2020. It still is. Likewise, sleeping on Litecoin after May 2022 as it stands on the cusp of its third halving event will be another opportunity many will miss. They’ll conjure up all sorts of piffle about the asset, all of which falls apart under the most basic scrutiny and observable reality. Remember, upwards of ninety percent of ‘crypto’ is vapourware; actual nonsense, bridges to nowhere built on fabricated narratives and useless protocols that are entirely dislocated from reality and literally do not work (I’ve been waiting for some ETH to move from arbitrum nova to optimism for over five days).
Litecoin’s premise is simple; no-bs horizontal scaling with 100% uptime, integrity and a limited supply that cannot be changed; near-instant transactions and optional privacy features with MWEB. Many market participants who are led to believe that fundamentals do not matter will be in for a rude awakening when reality finally kicks in.
Onwards and upwards.
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The purpose of this newsletter analysis is to provide context to current events and cryptocurrency markets. It is released every Tuesday. I am not perfect and this is not a science — nor is this newsletter analysis a signals service or financial advice. While I cannot promise perfection I do my best to be honest and transparent.
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