It’s that time in the crypto space again. Bitcoin is about to hit a new all-time high (above $7,900) and altcoins are bleeding. But, as an experienced trader you already know that everything which goes up must come down. Soon or later Bitcoin will start to retrace and that’s the perfect time to invest it in other interesting cryptocurrencies.
Here’s something you should consider: Litecoin vs Bitcoin – a trade which can make us 90% profit!
On the daily LTCBTC chart above we see that Litecoin is in longterm downtrend against Bitcoin. However, Litecoin is maybe the only major altcoin which is still below $100 and all chances are it will soon raly from $64 to $70, then to $90 so it is a definitely worth of buying.
Some time ago Litecoin found the support at 0.007 BTC, I marked it for you on the chart. After that it bounced back to 0.01 but failed to stay above that level and it is going down again. All chances are LTC will drop further to 0.007 again and that’s the moment we should start hunting it.
Don’t buy it just because it touched the support line, but wait for a buying signal. “But, how do I know what’s a buying signal?” you’re wondering. Simply, if you see a lot of buyers are stepping in and pushing price higher, that’s it. Preferably, we want to see the hammer pattern formed somewhere around the support line. Take a look below.
You see that candlestick in the circle? That’s so called hammer and it’s very strong reversal pattern. It means that price dropped down but later during the trade, buyers managed to push price higher with a lot of force. When you see it on 1h, 4h, 1D chart it means you should consider to buy. Higher the time frame is, the signal is stronger.
So if you spot something like this on the LTCBTC support line at 0.007 BTC you can be pretty sure it will go up from there. Of course, nothing is guaranteed and you should always use stop loss. In this case, place it just bellow the end of the hammer or somewhere below 0.007 BTC.
One more important thing – when LTC touch the support line again it will form double bottom pattern, one of the strongest reversal pattern. That means we have big chances to go up from 0.007.
When to Take Profits?
Our fist target should be very strong resistance at 0.01 BTC. When LTC reach it again, a lot of sellers will be there ready to get rid of it and to take their BTC back. That’s why you should sell near 0.01 some of Litecoin you bought. It will drop again from there, but will try to break above again. That’s why we are not going to sell all our Litecoins, but will keep let’s say 50% of the amount we bought at the 0.007 support line.
Once when Litecoin pierce through the resistance line at 0.01 and starts to run higher, we can expect it to hit the descending trendline, which will be somewhere around 0.013 BTC or so. There you should sell the rest of your Litecoins. After that go to Youtube and play favorite song to celebrate your cryptocurrency trading success. “We are the champions” by Queen will be good choice. Make sure to scream “no time for losers” as a madman.
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