LTC 120day/45day Basic Trendline Analysis
So let's take a look at LTC's trading data on GDAX over the past few weeks and months. LTC is a good introduction to basic line analysis for the same reason its a pretty good crypto to own. It's stable(relative to other crypto) and predictable and its behavior lately can be easily shown by catching trends with lines. This is a basic tool I use to decide if a particular digital asset is at a reasonable price at a given point in time. Let's start with the 120 day:
We'll begin this one at a large volume price increase in May and terminate it at the recent price surge a few days ago. If you notice the bottom trend of the channel you see that it has a very linear path, its points of resistance growing ~30% per month. In other words, each month that has gone by has seen a 30% increase in the lowest traded price. Not bad! Take a look at the top trend which is the other line we will use to define LTC's price movement over time. It's a little more misbehaved than the bottom trend. When LTC experiences abnormal trade volume and a subsequent price increase it tends to balloon outside the channel before it is slowly brought down again by less hectic trading. Look closely, this happens two to four times, depending on how you interpret it. This has been characteristic of LTC this summer: a regularly increasing price floor with some occasional fervor and overpricing which attempts to correct within a week or two. This is very common for Litecoin and so most trading gains will be found by buying when it's cheap and selling during a high volume event, sometimes a window of only a few hours.
Let's look closely at the most recent 45 days.
We can easily see the same behavior at this smaller scale. Just a few days ago was a characteristic surge in price again thanks to abnormal volume. Assuming these trends are to continue, the recent price increase can be expected to correct to ~46-49 after volume remains normalised for a few more days. It's certainly possible that the price continues to go up! Check the trading volume and the stacking of the order book as the price is attempting to correct. That will give you some more insight into where the price is going. It is also possible for the price to decrease but this appears to be less likely at this time. I personally think this is an ancillary effect of both LTC's undervalued state, and BTC's growing pains.
Takeaways: LTC is usually too expensive when it's near the top of this trend channel if accompanied by large volume. Wait for profit taking over the next week to lower the price to give you a better buy price. LTC recovers quickly so if you are stuck with it, buy each significant dip you see and average your cost down until she recovers. Full disclosure, I am holding 20% of my current portfolio as LTC.
Thanks for reading, I hope this helped you in some way
BTC 17Bg4KwLRzBGcUyMenFhBTiaiiJSD6HBNi
ETH 0x55bfa88f1e9b8908516d91343be0a8bfde27cb56
LTC LNtbk8DYUWypLHCTxRLtX24UAQVZXi4wWq
DASH XatRCXWPYRsGzXxxB5EcDt9hSzWyqkVJjA
XMR 49aCSJGxcy1WtjtgZFHtk5gHfvL5mykChi6MuUL2ZDQrNXhez7baztVWbwaVe4vUMveKAzAiA4j8xgUi29TpKXpm3yRDKoy
ZEC t1UKo1zEuup6itsxBsGQb3r96vG54sfsYTD
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