Litecoin Price Analysis 2/25/2018

Had to hit you guys with a solid one for the day:

Image source: https://smartereum.com/3342/litecoin-price-predictions-2018-news-today/

First thing that I’m noticing here with Litecoin is that the Ichimoku is actually giving buy signals on the 4H chart.

The conversion line (blue) just crossed over the base line (red) 12 hours ago (3 periods)

+ the price is in the cloud currently.

Apologies if this is a bit difficult to see visually. I’ll post another view of the Ichimoku 4H chart for LTC USD with a white background to help clear up the signals here.

If you look here:

You can see that the price has recently crossed the EMA-50 on the 4H chart for LTC USD — Thus, the EMA-50 will now serve as support for the coin.

Why? Check out this short lesson:

Source: https://www.babypips.com/learn/forex/dynamic-support-and-resistance

Most times, the EMA values will serve as a firm support/resistance for coins/stocks. The greater the number of periods that you’re looking at for the EMA, the stronger the correlation with the price.

Moving forward:

There’s a very strong recent uptrend going on for LTC USD 4H

We established before that LTC had actually broken its own downtrend that it was previously in, unlike the majority of cryptos in cryptoland:

The accumulation/distribution speaks for itself.

People have been picking up this coin heavily over the past few days in specific ^

Here’s the Aroon Up + Down. What’s interesting is that the down is > up at this current moment in time on the 4H chart and that JUST happened. So, I would question the bullish sentiment present in LTC substantially.

There is definitely divergence in the DMI — so that can’t be denied. However, the ATX is well below the signal level of 25 — so this wouldn’t be a confirmed reading by that marker. We have to discard this because of that.

Here’s Connors’ RSI
Now here’s Connors’ RSI with the line smoothed out.

What is Connors’ RSI?

Check out this guide here:

https://www.qmatix.com/ConnorsRSI-Pullbacks-Guidebook.pdf

Also, the formal definition can be found here:

https://www.tradingview.com/wiki/Connors_RSI_(CRSI)

It’s too small for me to post the picture, so I’ll just re-print the definition below:

“Connors RSI (CRSI) is a technical analysis indicator created by Larry Connors that is actually a composite of three separate components. The Relative Strength Index (RSI), developed by J. Welles Wilder, plays an integral role in Connors RSI. In fact, Wilder’s RSI is used in two of the indicator’s three components. The three components, The RSI, Updown Length, and Rate-of-Change, combine to form a momentum oscillator. Connors RSI outputs a value between 0 and 100, which is then used to identify short-term overbought and oversold conditions.”

Basically, it’s a combination of RSI, UpDown Length, and Rate of Change (three separate indicators). They each, on their own, have usage and merit. I rarely use the RSI by itself because I have a lot of indicators that I look at that factor the RSI into its equation (Stoch RSI, Connors’, etc.)

Just like with Stoch. RSI — Connors’ RSI has two levels that reflect the ‘overbought’ and ‘oversold’ levels. Currently the raw data for the Connors’ RSI has LTC USD 4H being overbought, however, the smoothed out line (HMA average applied) doesn’t have it quite in the oversold territory yet and that one is a bit more sensitive to changes (in my opinion).

So, that’s not ‘danger’ zone yet for people who want to go long. However, given the status of the market (I believe that Bitcoin has a few more thousand left to fall) — I’m not entirely convinced that there is nearly enough firepower behind Litecoin for it to sustain any type of real run whilst Bitcoin is continuing its bear market — BTC is still the dominator of all cryptos in terms of $$ value in the market.

Here’s the Williams’ Alligator — has signaled uptrend yet though (green>red>blue)

MACD — everything that needs to be said has been said on that picture there.

Here’s Williams %R (momentum indicator) for LTC USD 4H. Indicating that LTC is overbought at the present moment in time. I tend to believe this one and I think that it’s a powerful indicator. When it crosses ’50’ from a point that was below in th8e lower black zone, that constitutes a buy signal.

This event has already occurred. Watch for the downtick though if it does occur.

Stoch RSI = overbought

What Could Be the Reason for the Sudden Uptick in Price?

Bullish statement by Charlie Lee (owner/founder of Litecoin) and @CryptosQueen

The obvious impact of these tweets doesn’t need to be stated. As to whether you think they’re true or not is up to you. I’ll reserve comment on them for this moment in time.

The biggest push in the bullish sentiment appears to be from the impending LitePay launch that’s coming:

https://www.inverse.com/article/41598-litecoin-price-litepay-launch-has-affected-cryptocurrency-value

(this is an article that’s talking about how the launch has affected the price)

” Litecoin’s February breakout might have had a lot to do with the announcement that Litepay — a Litecoin payment system — will become available in 41 countries on Monday, February 26”

This is obvious monumental news for the Litecoin community as well as crypto. It remains to be seen what the actual impact of this decision will be, but its obviously something that is making the entire community become more bullish on Litecoin than they are on any other investment in the space.

I’d imagine that the price will continue to boost up until the launch of this concept. Not sure what will happen to it following the launch. Let’s check out some statistics on the TX that are occurring on the LTC network at this very moment.

Source: https://bitinfocharts.com/comparison/litecoin-transactions.html#log&3m

So, based on this chart — the rate of actual adoption and TX usage for LTC hasn’t increased whatsoever in the past few days. If anything it’s actually dropped off a cliff. So, the majority of people that have picked up LTC are merely holding it.

The actual usage of this coin has dropped through the gutter since its high in December (like most cryptos).

In my opinion — it remains to be seen whether this will actually lead to greater adoption of the cryptocurrency itself. The whole cryptospace itself has flattened substantially since December, so it’ll be interesting to see whether this can rouse Litecoin to life.

Conclusion

I don’t see Litecoin climbing up too much more in the short-term. Looks like whatever run that its went on (this should be considered a run in light of the fact that the overall market has been getting murdered).

The momentum indicators seem to be signaling that this run is fairly exhausted and I think that the rest of the indicators are doing the same as well. In fact, there’s nothing that’s indicating to me that there is a lot of strength in the upward price movement of the coin in general. The fact that its already hit ‘overbought’ levels, says a lot.

In my humble opinion, I don’t think that this is a good position to get in long with Litecoin despite the very very bullish tweets coming from the community and Charlie Lee himself.

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