MarcPMarkets

LTCUSD: Support Holding. Watch Formations, Trend Line Break.

BITFINEX:LTCUSD   Litecoin / Dollar
LTCUSD             update: Since the pre Senate hearings sell off, this market has found support at the 118 level and has formed a double bottom . At the moment, price is retracing along with the other major coins, but in the face of a double bottom , it is reasonable to anticipate a higher low which offers a new buying opportunity.

I wrote about the 118 level recently and that level serves as the lower boundary of the reversal zone. If price is going to fake everyone out, it is most likely to happen in this zone which is basically an extension of the recent low. Price did just that. It went slightly lower, but the long wick indicates that the lower prices were rejected quickly. The market is showing that the 106 area is where the most buyers buy. In order for the reversal zone to be void, price needs to close below it. Breaking below and forming a wick is not a break with conviction.

Buying into the second low is not easy to do, and if you missed it, don't worry because there is another opportunity to buy into this market at attractive prices. Often when a market is transitioning out of a trend, it is a process, not a single event. In this case, the next part of the process that would offer another chance to buy is the higher low formation. Keep in mind the the 186 to 138 area is a .618 support zone relevant to the largest bullish structure. IF this market is going to find support and bounce, this is the zone where it is more likely for that process to unfold.

What needs to happen next in order to confirm the higher low is a bullish candle formation or strong close combination. For example IF the current candle closes in its present configuration ( pin bar ) and the next candle breaks above the high, that is a bullish confirmation and trigger to go long. Further confirmation would be the break of the bearish trend line that originates from the recent highs. Especially if this break coincides with a compromise of the recent peak in the 169 area.

What will negate this scenario is if price closes weak. If BTC             retests its lows, this market is likely to follow. Any retest and bullish reversal off the 118 level is another buying opportunity as well. Keep in mind the time horizon that I am evaluating is for position trading and possible swing trading. This means even though the most immediate movement may be bearish , I am anticipating it can turn in order to be in line with the bigger picture and NOT react to the noise.

In summary, like I always say, it's not about being "right", it is about listening and adjusting. Since I can only play one side of the market, and since my long term outlook is bullish , I am only interested in positioning for a broader rally which takes time to unfold. Buying in this zone is still attractive, but you must consider the risk which can be evaluated from the 106 low. The best way to participate in a broader rally is to build a position incrementally, so that you are immune to gyrations or selling spikes. Once the market confirms strength is returning, not only are you in a good position, but then you can add to a winner which is a more conservative position building strategy. Focus on the risks, know your personal loss limit and use these internal reference points to structure how aggressive or conservative you want to be. In this game, you make the rules that govern your actions, not outside forces like the market.

Questions and comments welcome.
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snapshot


Double bottom and higher low? Recipe for bearish trend line break. This is a significant sign of strength. The steep bullish candle is a typical sign of short covering and new longs reacting to the breakout. Often what follows this type of pattern is a retest of the bearish trend line which tends to act as a minor support. As this market continues, I will be anticipating support levels to hold, and resistances to break.
Marc Principato |Author: Analyze Any Financial Market Like The Pros Using Price Action| http://www.Priceactiontraders.net
Right on Marc!
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With the news about LitePay LTC will have a large breakout.
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You're a star Marc!
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" retest of the bearish trend line" Could someone clarify what Marc means here? I was under the impression we had broken through the bearish trend line.
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max69 max69
@MarcPMarkets, anticipating a return to the 150s?
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Damn you're good.
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check this out.
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thank you for the great analysis
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I expect ltc to do more sideways movement as its done in the past
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Hey Marc, I agree with you about everything here. Especially about of beeing right or wrong. Some here find it esp important of beeing right... But It all depends on the time perspective.


The hearing had some interesting parts, esp the US expectations on a possible market cap in the future ect. That in fact underlined my longterm bullish point of view.

I would not be surprised if the market manages a 5 times market cap this year from today's point. Taking this into account today's numbers and lows are pretty much not relevant.

And we should not forget that institutional money is not yet in the market and I'm sure that at some point it will be (given some years)

Thanks again for you high quality reports.



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