The Litecoin/Ethereum Swing Trade (LTC/ETH)
מעודכן
My crypto portfolio has been weighted more heavily towards Ethereum for this bull market so far. This has been good, since it has even outpaced Bitcoin up until this point (when measured by price increase from bear market bottom - now a 20x move, compared with Bitcoin's 15x). My entries were at $107 and $130. I trimmed my initial risk not too long ago, so at this point it's about managing my portfolio for best market performance. Sure, I could enter some DeFi projects, but that would require more careful management - something I do not have the time for at the moment, being in graduate school and essentially working full-time.
The strategy here was to reduce my Ethereum position by 23-25% today. In doing so, I have doubled my Litecoin allocation. Why? On the above charts, you can see that Litecoin has underperformed. Sure, it might continue to do so, but Grayscale has increased its LTC purchasing, and plans to do so for the rest of 2021, as far as I know. Additionally, LTC is still over 50% down from all-time high, and the LTC/ETH ratio is at an all-time low, testing the bottom of an enormous broadening wedge. It's possible the ratio never gets back to 0.5, so I plan to take profit back to ETH in stages - perhaps some at 0.2 and then more at 0.3, and save a bit in case it goes higher. This trade makes sense to me. In 2019, I converted much of the LTC I bought at $32 to ETH when the LTC/ETH ratio was close to 0.5. Buying back now, at an 80% discount, is pretty nice.
On the USD pair, LTC is juuuust sneaking its way back into the middle of the broadening wedge I've been eyeing for weeks. If this pattern breaks to the UPSIDE, it has a lot of pent-up energy, due to the wild swings within the broadening pattern. On the bearish side, LTCUD can test the bottom of the wedge, or even break down. I can also see a deeper wick against ETH. I'm prepared for something like this to happen as well. On the upside, I'm still targeting around $250 and then all-time high levels. Here's the chart zoomed in:
I can also see a dump to the 100 day MA (green), currently in the low $100's.
This is just how I'm managing my own portfolio, and is not meant to be financial advice. My posts on TradingView are essentially my own trading journal. It helps to have the permanence of these posts to see whether I was right or wrong. For others, this is meant for speculation, entertainment, and education only. Please consult a professional and do your own risk assessment and research before investing. Markets are extremely volatile right now, and emotions are running high.
-Victor Cobra
The strategy here was to reduce my Ethereum position by 23-25% today. In doing so, I have doubled my Litecoin allocation. Why? On the above charts, you can see that Litecoin has underperformed. Sure, it might continue to do so, but Grayscale has increased its LTC purchasing, and plans to do so for the rest of 2021, as far as I know. Additionally, LTC is still over 50% down from all-time high, and the LTC/ETH ratio is at an all-time low, testing the bottom of an enormous broadening wedge. It's possible the ratio never gets back to 0.5, so I plan to take profit back to ETH in stages - perhaps some at 0.2 and then more at 0.3, and save a bit in case it goes higher. This trade makes sense to me. In 2019, I converted much of the LTC I bought at $32 to ETH when the LTC/ETH ratio was close to 0.5. Buying back now, at an 80% discount, is pretty nice.
On the USD pair, LTC is juuuust sneaking its way back into the middle of the broadening wedge I've been eyeing for weeks. If this pattern breaks to the UPSIDE, it has a lot of pent-up energy, due to the wild swings within the broadening pattern. On the bearish side, LTCUD can test the bottom of the wedge, or even break down. I can also see a deeper wick against ETH. I'm prepared for something like this to happen as well. On the upside, I'm still targeting around $250 and then all-time high levels. Here's the chart zoomed in:
I can also see a dump to the 100 day MA (green), currently in the low $100's.
This is just how I'm managing my own portfolio, and is not meant to be financial advice. My posts on TradingView are essentially my own trading journal. It helps to have the permanence of these posts to see whether I was right or wrong. For others, this is meant for speculation, entertainment, and education only. Please consult a professional and do your own risk assessment and research before investing. Markets are extremely volatile right now, and emotions are running high.
-Victor Cobra
הערה
Something I forgot to mention in this analysis is of course the LTC/BTC pair, which also looks pretty horrendous, but has not made a substantial new low recently. If it can finally break out of the never-ending downtrend, that would be a good sign. But this swing trade may take a lot of patience. הערה
Looking at the Coinbase chart, it actually seems that LTC is having trouble getting back above the middle trendline of this broadening wedge. If it can get above, that would be a great sign. Otherwise, the lower trendline and the 100 day MA exist below as potential support. הערה
LTC/ETH has bounced from the trendline, as I hoped it would. However, it's far too early to tell if this is the beginning of a bigger reversal for the pair. This could take a while to play out as well. הערה
This bullish divergence is starting to look good, and the MA's on the 4H are aiming for bullish crosses within the next interval. Not totally convinced until price break above 0.12ish. הערה
Sneaky sneaky...sneaking back above my trendline. Wouldn't be surprised to see this thing go to $250+ in one quick move. Support is below at the 9d EMA (orange), around $156. הערה
Nice impulse and then retest of the trendline. הערה
The BTC pair looks like a huge multi-month bullish divergence. This could mean it has been simply under accumulation since May of last year. הערה
Litecoin hasn't quite made the impulse I was hoping for. It looks fairly decent against ETH here, but the LTC/BTC ratio is still confined to a strong downtrend. Currently LTC/USD is in a small triangle, which should resolve soon. It has uptrend support around $188-190, and major horizontal resistance between $220-230. If it breaks $230, it should head up to the $250 resistance. הערה
In order to have a larger impulse up, LTC/BTC will need to break to the upside. It must clear the major downtrend (rejected recently pretty heavily) and the 200 day MA (blue) הערה
Here's the short term triangle. It should resolve within the next half-day הערה
Broke down from the short term triangle, but if it gets back above support and clears the downtrend, LTC can start making new highs again. Current support at $203, 194, and 185. הערה
LTC broke the shorter term downtrend has made a new cycle high. If it can break this horizontal level against ETH, it can go to ATH pretty quickly. הערה
Unfortunately LTC/ETH got rejected from the previous support turned resistance, and it has also headed to new lows against Bitcoin. On Balance Volume shows that people are not interested in buying LTC with BTC right now, so the only way the ratio goes up is if whales buy in droves in a coordinated move (like what has happened before). Looking at the USD chart, LTC now has failed to hold the middle of the wedge, and could easily drop to the $120-130 range next. ALMOST got to the $250 target, but sellers were very aggressive above $225. LTC/BTC, showing declining OBV as price remains flat (bearish). LTC/USD showing the failure to hold the middle of the wedge.
If LTC drops out of the wedge, it can head right back to the low $100's and then the $60 range.
הערה
On the bullish side, if LTC can bounce quickly back above $200, that would be a great sign of strength (taking out two major levels - $185 and $194)הערה
This trade is really taking a lot of patience :) But selling momentum could be coming to an end over the next month or so. Here's the LTC/BTC monthly chart, where you can see that the MACD is very close to flipping green. הערה
I think LTC will need to hold this orange trendline in order to avoid something like my yellow scenario (or worse). If it continues to find support here, that would be a good sign. The initial bounce was pretty strong, but it looks like a retest of support needed to happen. If LTC can break above the middle blue trendline within the larger wedge, it can fly up to new highs. Feeling a bit neutral here, with stocks sliding and the Dollar trying to rebound. הערה
I've decided to hold this for the remainder of the cycle. Observing the chart, it seems LTC peaks against ETH as BTC also reaches a major peak.הערה
REKT for now. Woops. Decent chance it bounces here, at the channel support. 
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