Litecoin responds to the risk of “double top” after LTC price rises by 37% in November

Litecoin responds to the risk of “double top” after LTC price rises by 37% in November



Litecoin price rose 37% in November (LTC) Risk exhaustion as “Silver cryptocurrency“It implies the formation of a double top chart pattern.

this Classic bearish reversal setting When the price forms two consecutive peaks of almost the same height, each upward movement will encounter a strong correction to the common support level, which is called the “neckline”.

Usually, the price breaks below the support level and falls to the maximum height between the double peak and the neckline.

So it seems that Litecoin is forming half of the double top pattern, as shown in the figure below.

The LTC/USD four-hour price chart shows a “double top” pattern. Source: TradingView

detailed, LTC price It peaked near $295.50 on November 10-the first peak-and then corrected downward to the neckline support around $249. It then rebounded to $280 (the second highest), and finally attracted profit-takers to make a small correction, which is still in progress.

Litecoin needs to expand its sell-off to retest the neckline. At the same time, a break of the support level will activate the double top breakout setting, and the profit target will be close to $200.

Bitcoin correlation

Litecoin’s bearish reversal pattern is emerging Inflation in the U.S. It has soared to a three-year high, prompting investors to seek hedges with various financial instruments.

For example, the most actively traded gold futures recently recorded its best week in six months, rising 2.9% to US$1,868.50 per troy ounce, second only to the US Department of Labor Report The consumer price index (CPI) rose 6.2% year-on-year. This marks the fifth consecutive month that the inflation rate has exceeded 5%.

Many investors and/or traders Switch to bitcoin (BitcoinAfter seeing it as a safety net against rising inflation, Wilfred Daye, head of Securitize Capital, the asset management arm of Securitize Inc, pointed out that he admitted that although price fluctuations are worrying, people still choose cryptocurrencies as a hedge.

“We don’t have a long enough history to assert that Bitcoin is indeed an inflation hedge,” Daye Said, Added:

“I think gold is still a better inflation hedge. But Bitcoin as an inflation hedge is a new sexy concept-people like new ideas.”

Bitcoin’s growth also helps Altcoins Because of its broader influence in the entire cryptocurrency market, it has risen simultaneously. Litecoin has always been one of the beneficiaries of the rally. According to the collected data, its one-year correlation efficiency with Bitcoin is higher than zero value of 0.71 Encryption Observation.

LTC/USD to BTC/USD four-hour price chart. Source: TradingView

Therefore, concerns about rising inflation have become a booster for Litecoin to profit from Bitcoin. This could disrupt the above-mentioned bearish double top setup-and validate the bullish pattern that has been active since last weekend.

Litecoin “Bull Flag” sets LTC target at $350

Known as the bull market pennant, a bullish continuation pattern will appear when the price consolidates sideways within the triangle structure after a strong upward rebound. When the price breaks the upper trend line of the triangle with strong volume, traders confirm a bullish breakout.

related: Litecoin hit a 6-month high, LTC price soared 20% in 24 hours

In doing so, they set a level equal to the height of the previous upward trend (aka flagpole) as their profit target. Therefore, as shown in the chart below, the price of Litecoin is expected to rise further to 350 USD.

LTC/USD 4-hour price chart with a bull market pennant setting. Source: TradingView

At the same time, if there is no decisive bullish follow-up, the double top setting may be activated. If there is a bearish downtrend, this will use the “multi-month uptrend line support” in the chart as the next downside target; coincidentally, the target is also close to $200.

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