Bitcoin, Litecoin Settle in Large Triangles

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Both bitcoin and litecoin have settled into large triangle patterns. The formations are ascending triangles, potentially signalling that more gains are on the way.

Bitcoin Settles in a Large Triangle Pattern

With the price action during the past seven days, bitcoin has settled firmly inside a large triangle. On the picture below you can see this formation. Prices peaked at $462.16 on April 26th and we’ve been rang-bound ever since, albeit with a slight bullish bias.

BTCUSDDaily-may17

Theory says that ascending triangles point to more gains going forward. Still, a more prudent approach would be to wait for prices to breakout first. We’re currently quoted at $452 dollars per coin and the high is at $462 dollars. A decisive breakout above the $462-$465 resistance on Fxopen and $470-$475 on other bitcoin exchanges should jump-start the lost bullish momentum. A clean break of this resistance has the potential for quick gains toward the $500 round figure, last year’s high for BTC/USD on most exchanges. The medium-term trend is also bullish for bitcoin while the long-term trend is still neutral.

On the downside, a breakdown below the lower bound of the triangle around $445 may end the current uptrend. A break of the next swing low at $435 dollars may turn the short-term trend to bearish. The breakout point for the current rally near $426 dollars may act as support, at least temporarily. We have more levels on the downside at the $412 swing low and the round $400 figure.

Litecoin in its Own Triangle

Alternative cryptocurrency Litecoin is in a similar boat as big brother. Prices here are wedged in their own triangle. We peaked at $4.194 on April 17th and have been range-bound ever since. On the chart below we can see the price action in LTC/USD during the past few weeks.

LTCUSDDaily-may17

A clean breakout of the highs at $4.194 would confirm the ascending triangle as a trend continuation pattern. Above here we have resistance at the round $4.50 figure, followed by the $4.85 swing high. Higher up we have another round figure at $5 dollars. From here we have a large gap to the next level at $8.64 dollars (2015 high) but as we’ve written previously, some resistance levels are likely to emerge in between. Potential candidates include the round figures at $6, $7 and $8 dollars as well as $6.50 and $7.50. These round figures often act as support/resistance levels or price magnets.

On the downside, a decisive break of the lower bound of the triangle near $3.78 dollars per coin would end the current rally.

 

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