• Francisco Hernandez

Number Go Sideways (NgS) with Litecoin

Introduction


It has been a couple months now since I have written about Litecoin. Since then, Litecoin is only down -1.14%. Essentially, Litecoin has been moving sideways. Although there was one, maybe two, tradable events I can identify in hindsight, not much has been going on with Litecoin. In this article I catch up to what Litecoin has done in the past two months and where it stands in the market today.

Litecoin only down -1.14% in the last two months


Moving Averages


Since April 23rd, 2020, when I last wrote about Litecoin, the 20-day moving average (MA; red) had crossed over the 50-day MA (orange). Price followed and made about a 14% gain before dropping down again. This is that tradable event I mentioned above I saw in hindsight. This type of cross, where a low time frame MA crosses over a higher time frame MA, is known as a golden cross. Another golden cross occurred in week one of June with the both the 20- and 50-day MAs crossing over the 100-day MA (yellow). That golden cross did not bear any fruit. Price is currently below each MA. The 20-day MA is sitting just under the 50-day MA, but still over the 100-day MA.

Moving averages are contracting


Bollinger Bands


Price broke over the 20-day moving average and past the upper Bollinger Band (BB; white) since last writing. As I mentioned above, price broke down after the 14% gain. Price bounced off the middle BB (aka 20-day MA) and eventually broke down past it into the lower BB (white). Price broke past the lower BB but managed to close within the band. Price tested the middle band, was rejected, and upon re-testing the middle band broke above it. This is that second tradable event I have identified. In this case, the trade could have been opened when price closed above the middle band and closed when price close over the upper BB three days later (a potential gain of only 9%). Since that, however, price broke down and is currently sitting in and appears to be riding the lower band.

Price riding the lower Bollinger Band


Fibonacci Retracements


I tried my modified approach to Fibonacci retracements in this article. However, when I used zero as the starting point of the retracement and the all-time-high (ATH) as the end point, the range was so large, the graph was not useful. So rather than using zero, I used the low after the ATH of $22.86. This resulted in a less exaggerated graph and was slightly more useful. It is still not the best-looking graph, but it will do for now. As is evident in the chart below, price has been moving sideways. Price is currently sitting the lower end of the 78.6% retracement line of $94.81. It looks like Litecoin has a lot of recovering to do. Lastly, although it is not depicted in the graph below, when prices across all assets dropped in response to the COVID-19 pandemic, Litecoin got so close to touching the 100% retracement line from the low after the ATH.

Price moving sideways in the 78.6% retracement level



On Balance Volume


The On Balance Volume (OBV) looks typical. It is resembling the price action of Litecoin, as it should. When prices went up, trade volume when up and vice versa. This is what is depicted in the graph below. The only noteworthy thing here is that the OBV has managed to avoid making a lower low than the low made around March 12th, 2020 and is pointing upward (i.e., bullish bias). It is technically a higher low. However, since price is neutral and moving sideways, it is hard to tell if the OBV will maintain its status.

The On Balance Volume made a higher low


Chaikin Money Flow


The Chaikin Money Flow (CMF) has made a lower low since last writing but has since then made its way up to over the zero line and into the positive territory. Currently the CMF is pointing upward (i.e., bullish bias). As with the OBV, I want to wait to see where things go given a sideways market.

The Chaikin Money flow in positive territory


MACD


The MACD is completely neutral, moving up and over the zero line for the last two months. Currently the MACD line (blue) is below the signal line (red) and both are under the zero line. Unlike the OBV and CMF, this indicator has a bearish bias.

MACD is neutral


Conclusion


The current Litecoin market is moving sideways and is neutral. Price is currently not in a good position in reference to moving averages (MA), Bollinger Bands (BB), and Fibonacci retracements. The On Balance Volume (OBV) and Chaikin Money Flow (CMF) are showing a bullish bias. However, the MACD is showing divergence and has a bearing bias. I am neutral right now with the current Litecoin charts.

BTSE regularly hosts the technical analysis of experienced BTSE traders. Please note that we neither endorse any analyses published nor give you financial advice. Please make any trading decisions based on your own research.

Our aim is to create a platform that offers you the most enjoyable trading experience. If you have questions or suggestions, please don’t hesitate to reach out to us at feedback@btse.com or DM us on Twitter: @BTSEcom.

Categories
Company
Community

© 2019-2020 btse.com All rights reserved