While the "story" of the cryptocurrency space has been Bitcoin's explosive price action, one project that deserves a considerable amount of attention (perhaps even more so than Bitcoin), would be Litecoin.
In case you're reading this and are unaware, Litecoin has had an absolutely meteoric week this week.
As we can see from the chart above, Litecoin gained over 50% in just 3 and a half days - which is almost unheard of for this project considering how low its volatility was throughout the majority of 2019.
Specifically, Litecoin hasn't seen bullish price action like this since 2019, in the weeks leading up to its second halving events.
As we can see in the photo above, Litecoin earned itself a hefty +500% in the 6 months leading up to the peak of the pre-halving pump in 2019 - which is worthy of note when you consider the performance of other cryptoassets during that same time period (December 2018 - June 2019; first 6 months of the year after the market had "bottomed" out at the end of 2018).
Assuming we were to peg March 2020 (market crashes) as the localized bottom for Litecoin this year on its ascension, our chart would appear as such:
In the chart above, we can see that Litecoin has appreciated by +330%, which is significant but, comparatively, doesn't match the ceiling that we've seen Litecoin hit in terms of:
A) Pump ability
B) Localized Pricing
Juxtaposing the Previous Localized High Set in 2019 With Litecoin's Current Price Action
Despite all of the bullish action we've seen from Litecoin over the past few weeks - it appears that it is still underperforming its early 2019 benchmark.
What That Means
In 2019, the price of Litecoin appreciated at a much faster rate than Litecoin is currently.
Litecoin also hit a localized top during that halving run that's still > 20%+ where the price of Litecoin is currently
When putting these facts into perspective, Litecoin's price action should be seen as far from "extreme" or "too heated" (the commentary that seems to be going around the space for some reason).
Let's Start Charting
We're going to stay on the daily resolution for this one.
We'll start by annotating our chart.
First thing we'll do is identify the diagonal underlying support trend that has protected the price on its way up:
Another look at the same graphic with each touch against the support identified:
With that aside, there is an overhead resistance that we need to identify (to ensure that its a valid resistance point that we've identified here):
If we pan back though, we can see where the price stagnated at this point in the past (not too many times though, so this shouldn't be a particularly crazy point of overhead resistance):
Litecoin on the Weekly Resolution
Yup, the weekly resolution - and for good reason too because Litecoin is just about to fulfill its golden cross formation.
What is a Golden Cross?
'Golden cross' is a term used to describe the occurrence of the MA-50 crossing above the MA-100 or MA-200 (typically the latter).
While there is a ton of trading logic to justify inferences made when a 'faster' moving average crosses above or below a 'shorter' one, there is no concrete logic to justify the idea that there is something particularly special about the 50-period moving average crossing above or below the 200 period moving average.
However, after decades of observation in the U.S. stock markets and in other locations, investors have documented what appears to be a strong correlation between this particular 'cross' and subsequent price action.
Below is the formal definition provided by Investopedia:
Observing the Golden Cross on the Weekly Resolution for Litecoin
In the chart above, the golden line represents the EMA-50 and the purple line represents the EMA-200.
If we examine the chart above closely, we can see that the EMA-50 crossed above the EMA-200 just two short periods ago:
The 'golden cross' has proven to be extremely bullish in the world of cryptocurrency in times past when we've identified its occurrence on other charts.
Never before has Librehash observed such a cross on the weekly resolution ; the higher the resolution, the more impactful the reading form the indicator is. Thus, in this situation, the formation of the golden cross could prove to be foreshadowing of an extremely bullish future for Litecoin.
Taking a Quick Look at Some Other Indicators on the Weekly Resolution for Litecoin
In this next section we're going to take a look at a ton of additional metrics for Litecoin on the weekly resolution (which includes our favorite, usual rotation of indicators that we pull out in circumstances).
Balance of Power RSI (custom indicator)
We've explained how this indicator works a million times now, but its never a problem to give another reminder.
Quick Overview of the Balance of Power Indicator
It tracks the 'balance of power' between the "bulls" and "bears".
To give a formal definition (from the original creators of the indicator), "BOP tells you whether the underlying action in the trading of a stock is characterized by systematic buying (accumulation) or systematic selling (distribution)."
More importantly, "The single most definitive and valuable characteristic of BOP is a pronounced ability to contradict price movement." source ; this statement is extremely true because this ability to provide a seemingly contrary assessment stems the fact that the indicator is designed to pinpoint instancs of distribution and accumulation in the market.
As market veterans can attest to, there are plenty of times when "whales" are exiting a given stock / asset as its increasing in price.
This is usually their preferred strategy as it allows them to "sell into" rising demand - circumventing potential losses that would otherwise come from unloading one's bags while the price is trading sideways (consolidation) or tilting to the south (i.e., "dumping").
Finally Taking a Look at Litecoin's Balance of Power
Litecoin's reading on the Balance of Power RSI for the weekly resolution is extremely bullish.
While some may interpret a breach of the 'ob/os' zone as indicative that the bulls / bears (depending direction)