Cryptocurrency activity has risen sharply over the last few days as Bitcoin is trading just below its all-time high and as many altcoins have seen a sharp boost. One of these coins is Litecoin, LTC/USD, and it has risen by 25% from last week's low. But the price has done more than that. It has also triggered a large double top pattern or ascending triangle pattern, depending on how you interpret the charts. I am viewing it as an ascending triangle, and that makes the price action very interesting.
LTC/USD price trend to remain upwards above $232
The price was rejected at $244 on February 20 and April 6, and thereby forming a double top. The price is also supported by an upward pointing trend line that goes via February 28 low of $152.84 and March 25 low of $167.8. Together, the horizontal level and trend line provide us with an ascending triangle pattern, with a target of $320, a rise of about 31.5% from the breakout point of $244.33.
There are different ways to place the stop loss to protect the downside on a pattern like this, but the general idea is that the price is not allowed to trade deeply back into the pattern.
A longer-term trader that does not want to be too close to the price action would probably place the stop below the April 8 low of $216.84, while someone like myself would like to be close to the price and thereby increase the risk-reward ratio will focus on the $232 level.
As for latecomers' buy levels, they will probably focus on the £234 to £247.30 range.
What is your opinion? Interact with Alex via Twitter.
LTC/USD Daily Chart:
High-risk investment warning: Trading Foreign Exchange (Forex) and Contracts for Differences (CFDs) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin. Any opinions, news, research, analysis, prices or other information contained in this presentation is provided as general market commentary and does not constitute investment advice.
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