Source: PaxForex Premium Analytics Portal, Fundamental Insight
Yesterday’s sudden Bitcoin plunge dragged the entire cryptocurrency sector down. It followed a Wall Street Journal report that SpaceX marked down its Bitcoin holdings in 2021 and 2022 by $373 by selling its cryptocurrency holdings. The retail sector overreacted and dumped holdings, but investors must realize that SpaceX has quietly done so over the past two years and not yesterday. The sharp selling was due to a temporary confidence loss that one of the biggest supporters headed for the exit. While it makes sense for Bitcoin to continue to slide, as other projects have long offered everything Bitcoin wanted to do but could not or did not, the knock-on effects of the sell-off created excellent buying opportunities.
Litecoin stands out as an attractive long position. The long-awaited halving even produced a 10%+ sell-off, countering expectations of a massive rally similar to previous halving events. It also points to a maturing sector. The long-term fundamentals for Litecoin rank among the best, as it offers everything a cryptocurrency set to disrupt fiat transactions requires. Litecoin also has a significant adoption rate among many high-growth and high-value industries, like gaming, sports betting, digital peer-to-peer payment processing firms, and well-known brands globally.
The post-halving sell-off created a long-term buying opportunity, magnified by the Bitcoin-fueled sell-off, but short-term volatility will remain as bulls and bears fight for control over the next directional move. Buying the dips in the LTC/USD should reward patient investors, as the LTC/USD has a history of massive rallies following extreme sell-offs. The price of the LTC/USD plunged from $114+ to below $56 over the past six weeks, but the outlook remains more bullish than it has over the past few years.
The forecast for the LTC/USD remains cautiously bullish after the one-day slump that started yesterday evening led by Bitcoin. It resulted in a sharp drop in the Kijun-sen and the Tenkan-sen, which should stabilize over the coming trading sessions. The Ichimoku Kinko Hyo Cloud completed a bearish crossover, likely to reverse as this cryptocurrency rebounds from multi-month lows. Traders should monitor the CCI in extreme oversold territory where a positive divergence formed. A breakout in this technical indicator above -100 could result in a powerful reversal rally. Can bulls wrestle control from bears over the LTC/USD and push this cryptocurrency pair into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000+ pips per month.
Should price action for the LTC/USD remain inside the or breakout above the 55.15 to 66.30 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 64.40
- Take Profit Zone: 78.90 – 85.35
- Stop Loss Level: 47.20
Should price action for the LTC/USD breakdown below 55.15, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 47.20
- Take Profit Zone: 38.95 – 40.05
- Stop Loss Level: 55.15
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