LTC struggles with double the top risk after price hikes of 37%
LTC’s 37% rally in November threatens to dry up as the “silver cryptocurrency” shows more signs of a double peak.
The classic bearish reversal setup occurs when price hits two consecutive highs of roughly the same level, with each upward move hitting a sharp correction towards a common support level called the “neckline”.
Usually the price breaks below the support and drops to the maximum height between the top of the double top and the neckline.
So when it showed up, LTC was in the process of forming a double top, as shown in the graphic below.
LTC / USD 4-hour price chart and double-top pattern | Source: TradingView
In particular, LTC peaked at $ 295.5 (first high) on Nov. 10, before correcting downward toward neck support by $ 249. After that, the price rebounded to $ 280 (second high) which drove everyone to profit taking, caused a small correction and is not over yet.
LTC needs to extend the sale to retest the clipping. Meanwhile, a break below support would trigger a double-top breakout setup, with a profit target near $ 200.
Correlation with Bitcoin
LTC’s bearish reversal pattern emerged as inflation in the United States rose to a three-decade high, causing investors to seek hedging across a variety of financial instruments.
For example, the most actively traded gold futures contract recently hit its best week in six months, rising 2.9% to $ 1,868.5 an ounce after the US Department of Labor released its price index last year. This was the fifth straight month that inflation was above 5%.
According to Wilfred Daye, head of Securifying Capital, the wealth management arm of Securifying Inc, many investors and / or traders turned to Bitcoin after seeing it as a safety net against rising inflation. Brothers admit that despite the associated price volatility, people have chosen cryptocurrencies as a hedge.
“We don’t have enough history to say that Bitcoin is actually an inflation hedge. I think gold is still a better protection against inflation. But Bitcoin as a hedge against inflation is seen as a new evocative concept – people love new ideas. “
Bitcoin’s growth momentum has also helped Altcoins rise at the same time thanks to their broader influence on the crypto market. LTC was one of the coins that benefited from this rally, with a one-year correlation with Bitcoin of 0.71, according to data from Cointelegraph. Crypto watch.
LTC price chart/USD vs. BTC/USD 4 hours | Source: TradingView
As a result, concerns about persistently higher inflation acted as headwinds for Bitcoin LTC. This could weaken the bearish double-top setup shown above and confirm the bullish pattern that has been in place since late last week.
“OLDAh cow“Set the LTC target to 350 dollar
A bull flag is viewed as a bullish continuation pattern that occurs when prices consolidate sideways within a triangle structure after a strong rally. Traders confirm a bullish breakout when the price breaks the upper trendline of the triangle during strong volume.
As a profit target, they aim at a length that corresponds to the height of the previous upward trend (also known as the flagpole). As a result, the LTC price points to a longer uptrend towards $ 350.
LTC price chart/USD 4 hours and Flag setting Cow | Source: TradingView
In the meantime, there is a risk that a clear rise in price will trigger a double-top setup. That makes “months of upward trendline support” the next downside target when it goes down. By the way, that goal is also closer to $ 200.
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LTC struggles with double the top risk after price hikes of 37%
LTC’s 37% rally in November threatens to dry up as the “silver cryptocurrency” shows more signs of a double peak.
The classic bearish reversal setup occurs when price hits two consecutive highs of roughly the same level, with each upward move hitting a sharp correction towards a common support level called the “neckline”.
Usually the price breaks below the support and drops to the maximum height between the top of the double top and the neckline.
So when it showed up, LTC was in the process of forming a double top, as shown in the graphic below.
LTC / USD 4-hour price chart and double-top pattern | Source: TradingView
In particular, LTC peaked at $ 295.5 (first high) on Nov. 10, before correcting downward toward neck support by $ 249. After that, the price rebounded to $ 280 (second high) which drove everyone to profit taking, caused a small correction and is not over yet.
LTC needs to extend the sale to retest the clipping. Meanwhile, a break below support would trigger a double-top breakout setup, with a profit target near $ 200.
Correlation with Bitcoin
LTC’s bearish reversal pattern emerged as inflation in the United States rose to a three-decade high, causing investors to seek hedging across a variety of financial instruments.
For example, the most actively traded gold futures contract recently hit its best week in six months, rising 2.9% to $ 1,868.5 an ounce after the US Department of Labor released its price index last year. This was the fifth straight month that inflation was above 5%.
According to Wilfred Daye, head of Securifying Capital, the wealth management arm of Securifying Inc, many investors and / or traders turned to Bitcoin after seeing it as a safety net against rising inflation. Brothers admit that despite the associated price volatility, people have chosen cryptocurrencies as a hedge.
“We don’t have enough history to say that Bitcoin is actually an inflation hedge. I think gold is still a better protection against inflation. But Bitcoin as a hedge against inflation is seen as a new evocative concept – people love new ideas. “
Bitcoin’s growth momentum has also helped Altcoins rise at the same time thanks to their broader influence on the crypto market. LTC was one of the coins that benefited from this rally, with a one-year correlation with Bitcoin of 0.71, according to data from Cointelegraph. Crypto watch.
LTC price chart/USD vs. BTC/USD 4 hours | Source: TradingView
As a result, concerns about persistently higher inflation acted as headwinds for Bitcoin LTC. This could weaken the bearish double-top setup shown above and confirm the bullish pattern that has been in place since late last week.
“OLDAh cow“Set the LTC target to 350 dollar
A bull flag is viewed as a bullish continuation pattern that occurs when prices consolidate sideways within a triangle structure after a strong rally. Traders confirm a bullish breakout when the price breaks the upper trendline of the triangle during strong volume.
As a profit target, they aim at a length that corresponds to the height of the previous upward trend (also known as the flagpole). As a result, the LTC price points to a longer uptrend towards $ 350.
LTC price chart/USD 4 hours and Flag setting Cow | Source: TradingView
In the meantime, there is a risk that a clear rise in price will trigger a double-top setup. That makes “months of upward trendline support” the next downside target when it goes down. By the way, that goal is also closer to $ 200.
Join Bitcoin Magazine Telegram to keep track of news and comment on this article: https://t.me/coincunews
At home at home
According to Cointelegraph
Follow the Youtube Channel | Subscribe to telegram channel | Follow Facebook page
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