A Detailed Breakdown of Litecoin‘s 4 12 months Cycles
Right here is the Bitcoin 4 12 months Cycle that I’ve mentioned in earlier newsletters:
And if we zoom out to the twelve-month timeframe for Litecoin…
We’ll discover that the worth chart is a spitting picture of the Bitcoin 12 month chart.
And similar to LTC/USD is lagging behind the worth motion of ETH/USD…
The Litecoin 4 12 months Cycle
Let’s dissect the Litecoin 4 12 months Cycle.
Candle 1 is arguably probably the most exponential section within the 4 12 months Cycle the place LTC/USD reaches a brand new All Time Excessive.
Candle 1 is then adopted by Candle 2 the place a Bear Market correction happens.
Apparently, Candle 2 retraced -92% in each LTC 4-12 months Cycles.
Candle 3 then follows which figures because the bottoming out candle.
Then comes Candle 4, which doesn’t eclipse Candle 3. In reality, Candle 4 kinds a Decrease Excessive relative to Candle 3.
That stated nevertheless, the underside of the candle physique of Candle 4 efficiently turns the highest of the candle physique of Candle 3 into a brand new help to kind a Greater Low.
This kinds the very beginnings a of macro U-Formed bullish reversal formation that precedes a brand new Candle 1 to start a brand new 4 12 months Cycle for LTC.
The Multi-12 months Downtrend…
Candle 1 performs an important function within the 4 12 months Cycle for Litecoin.
It’s the first candle in 4 years to have the ability to break the multi-year diagonal resistances that has figured as a critical level of rejection for worth.
This break of the multi-year trendline is what propels Litecoin to interrupt its outdated All Time Excessive (i.e. the ATH that was set within the earlier Candle 1) and enter worth Discovery in quest of a brand new All Time Excessive.
Bitcoin additionally has a multi-year trendline resistance that persistently rejects worth all through its personal 4 12 months Cycle:
That’s, this trendline acts as a resistance to Bitcoin’s worth for 3 years, the place Candle 4 is the candle that breaks the diagonal; for Litecoin, this trendline is damaged after 4 years in Candle 1.
Key 4 12 months Cycle Ranges for Litecoin
Let’s construct on the insights talked about earlier within the context of key 4 12 months Cycle worth ranges for Litecoin:
All through a whole Litecoin 4 12 months Cycle, worth tends to take care of a constant help (i.e. inexperienced stage) all through the years earlier than lastly taking off.
The First Litecoin 4 12 months Cycle (2013-2016)
For instance, within the first 4 12 months Cycle for Litecoin, ~$2.70 figured as a pivotal help (inexperienced) which Candles 1, 2, and three maintained (although not with out some draw back volatility within the type of wicks).
Crucially, Candle 4 kinds a Greater Low relative to the ~$2.70 help then turns the highest of Candle 3 into new help upon the twelve-month candle shut.
Extra, this Greater Low continues into Candle 1, whereby Candle 1 turns the highest of Candle 4 into new help earlier than spring-boarding into a brand new explosive uptrend.
The Second Litecoin 4 12 months Cycle (2017-2020)
Within the second Litecoin 4 12 months Cycle, worth rallies to never-before-seen All Time Highs.
Candle 2 then kinds and corrects -92%. In doing so, LTC produces a draw back wick into the purple horizontal stage of ~$23.70 to show this stage into a brand new help.
In any case, this very worth stage acted as a resistance within the 2013-2016 4 12 months Cycle, particularly in Candles 1 & 2 of that cycle.
Nevertheless, Candle 2 of the 2017-2020 cycle manages a candle shut above the inexperienced horizontal stage which was the earlier resistance in Candle 2 of the earlier 4-12 months Cycle.
In sum – a brand new Candle 2 turns the highest of an outdated Candle 2 into new help.
And in reality – the Candles 3 and 4 that observe proceed to carry this new help (whereby the candle-body of a Candle 3 is of an identical dimension in each cycle).
Essentially, the outdated resistance of ~$23.70 that rejected the outdated Candle 1 and Candle 2 is efficiently became a brand new multi-year help within the new Candles 2, 3, and 4.
Key Insights – Abstract:
- Candle 1 rallies to new All Time Highs.
- Candle 2 then kinds a Decrease Excessive relative to Candle 1 and begins a Bear Market.
- Candle 2 tends to retrace -92%.
- A brand new Candle 2 tends to show the highest of the outdated Candle 2 into a brand new help.
- This help is then revered by the following Candles 3 and 4.
- Candle 3 wicks in the direction of the upside to substantiate the continuation of the multi-year diagonal resistance.
- Candle 4 turns the highest of Candle 3 into help however kinds a Decrease Excessive relative to Candle 3.
- Candle 1 turns the highest of Candle 4 into new help.
- Candle 1 breaks the multi-year diagonal resistance.
- Candle 1 rallies to new All Time Highs.
- Steps 2 to 10 repeat.
The New Litecoin 4 12 months Cycle
What might the following Litecoin 4 12 months Cycle appear to be?
Assessing the height for Litecoin’s explosive Candle 1 uptrend in 2021 goes past the scope of this article.
As a substitute, this remaining a part of the e-newsletter is about what kind of worth motion we’d anticipate from Litecoin over the approaching years.
However for the sake of discourse, let’s look to the one recurring fixed in Litecoin’s 4 12 months Cycle – the Candle 2.
Every Candle 2 all through historical past has retraced -92%.
Primarily based on this perception, Litecoin due to this fact kinds a green-red vary that spans all the candle-body of Candle 2.
Within the first 4-12 months Cycle, Litecoin rallied +781% from the underside of the vary (inexperienced) to the highest (purple).
Within the second 4-12 months Cycle, Litecoin rallied +620% from the underside of the vary (inexperienced) to the highest (purple).
So for the sake of debate, let’s assume a diminishing fee of return by -160% (i.e. 780% – 620% = 160%).
If the Candle 1 have been to rally +460% (i.e. 620% – 160% = 460%) then this form of extrapolation would recommend a LTC Candle 1 peak in 2021 of round ~$1700 (not accounting for upside volatility/wicks).
So from then onwards – right here’s what the Litecoin 4 12 months Cycle might appear to be, primarily based on the important thing recurring technical worth tendencies mentioned all through the e-newsletter to date:
Wherever the explosive Candle 1 within the new 4 12 months Cycle peaks, Litecoin would seemingly kind a brand new Candle 2 the place the upside wick of this candle would kind a Decrease Excessive to the upside wick in Candle 1. This Decrease Excessive would determine as a resistance for the following few years.
Within the new Candle 2, LTC would expertise a brand new Bear Market, the place worth might retrace as much as -92%.
Wherever the brand new Candle 2 manages a full-bodied twelve-month candle shut, the underside of stated candle would determine as a key help for the years forward.
The brand new Candle 3 would expertise a number of volatility, however find yourself as a comparatively small candle upon twelve-month shut.
The brand new Candle 4 would flip the highest of the brand new Candle 3 into help, however in the end kind a Decrease Excessive to the upside wick produced by the brand new Candle 3.
And lastly, the Candle 1 of yet one more new 4 12 months Cycle would break the purple multi-year resistance to substantiate the start of a brand new macro uptrend.
General, this extrapolation could also be helpful as a visible information on what to anticipate from Litecoin’s worth motion for the upcoming years in its new 4 12 months Cycle.
Thanks for studying.
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