A Detailed Breakdown of Litecoin’s 4 Yr Cycles
Right here is the Bitcoin 4 Yr 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.
Litecoin showcases a 4 Yr Cycle – similar to Bitcoin.
And similar to LTC/USD is lagging behind the worth motion of ETH/USD…
LTC/USD is definitely additionally lagging behind Bitcoin in its personal 4 Yr Cycle…
The Litecoin 4 Yr Cycle
Let’s dissect the Litecoin 4 Yr Cycle.
Candle 1 is arguably essentially the most exponential part within the 4 Yr 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.
Curiously, Candle 2 retraced -92% in each LTC 4-Yr Cycles.
Candle 3 then follows which figures because the bottoming out candle.
Then comes Candle 4, which doesn’t eclipse Candle 3. The truth is, Candle 4 types 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 assist to kind a Larger Low.
This types the very beginnings a of macro U-Formed bullish reversal formation that precedes a brand new Candle 1 to start a brand new 4 Yr Cycle for LTC.
The Multi-Yr Downtrend…
Candle 1 performs an important position within the 4 Yr 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 previous All Time Excessive (i.e. the ATH that was set within the earlier Candle 1) and enter Worth Discovery seeking a brand new All Time Excessive.
Bitcoin additionally has a multi-year trendline resistance that constantly rejects worth all through its personal 4 Yr Cycle:
Nevertheless the primary distinction right here is that Bitcoin breaches this trendline a lot earlier than Litecoin does.
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.
This a testomony to Litecoin’s price-lag behind Bitcoin.
Key 4 Yr Cycle Ranges for Litecoin
Let’s construct on the insights talked about earlier within the context of key 4 Yr Cycle worth ranges for Litecoin:
All through a complete Litecoin 4 Yr Cycle, worth tends to keep up a constant assist (i.e. inexperienced stage) all through the years earlier than lastly taking off.
The First Litecoin 4 Yr Cycle (2013-2016)
For instance, within the first 4 Yr Cycle for Litecoin, ~$2.70 figured as a pivotal assist (inexperienced) which Candles 1, 2, and three maintained (although not with out some draw back volatility within the type of wicks).
Crucially, Candle 4 types a Larger Low relative to the ~$2.70 assist then turns the highest of Candle 3 into new assist upon the twelve-month candle shut.
Extra, this Larger Low continues into Candle 1, whereby Candle 1 turns the highest of Candle 4 into new assist earlier than spring-boarding into a brand new explosive uptrend.
The Second Litecoin 4 Yr Cycle (2017-2020)
Within the second Litecoin 4 Yr Cycle, worth rallies to never-before-seen All Time Highs.
Candle 2 then types and corrects -92%. In doing so, LTC produces a draw back wick into the crimson horizontal stage of ~$23.70 to show this stage into a brand new assist.
In any case, this very worth stage acted as a resistance within the 2013-2016 4 Yr 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-Yr Cycle.
In sum – a brand new Candle 2 turns the highest of an previous Candle 2 into new assist.
And actually – the Candles 3 and 4 that comply with proceed to carry this new assist (whereby the candle-body of a Candle 3 is of an identical measurement in each cycle).
Basically, the previous resistance of ~$23.70 that rejected the previous Candle 1 and Candle 2 is efficiently became a brand new multi-year assist within the new Candles 2, 3, and 4.
Key Insights – Abstract:
- Candle 1 rallies to new All Time Highs.
- Candle 2 then types 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 previous Candle 2 into a brand new assist.
- This assist 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 assist however types a Decrease Excessive relative to Candle 3.
- Candle 1 turns the highest of Candle 4 into new assist.
- 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 Yr Cycle
What may the following Litecoin 4 Yr Cycle appear to be?
Assessing the height for Litecoin’s explosive Candle 1 uptrend in 2021 goes past the scope of this article.
As an alternative, this last a part of the e-newsletter is about what kind of worth motion we would 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 Yr Cycle – the Candle 2.
Every Candle 2 all through historical past has retraced -92%.
Based mostly on this perception, Litecoin due to this fact types a green-red vary that spans the whole candle-body of Candle 2.
Within the first 4-Yr Cycle, Litecoin rallied +781% from the underside of the vary (inexperienced) to the highest (crimson).
Within the second 4-Yr Cycle, Litecoin rallied +620% from the underside of the vary (inexperienced) to the highest (crimson).
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 kind 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 Yr Cycle may 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 Yr Cycle peaks, Litecoin would probably 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 may 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 assist for the years forward.
The brand new Candle 3 would expertise plenty 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 assist, however finally kind a Decrease Excessive to the upside wick produced by the brand new Candle 3.
And lastly, the Candle 1 of one more new 4 Yr Cycle would break the purple multi-year resistance to substantiate the start of a brand new macro uptrend.
Total, 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 Yr Cycle.
Thanks for studying.
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