Trading Guru John Bollinger Warns Of Buying Litecoin, Here’s Why
November 29 2023 - 7:45AM
NEWSBTC
In his latest analysis, legendary trader John Bollinger has
expressed concerns over Litecoin’s performance, particularly in
comparison to Bitcoin. Bollinger, known for developing the popular
technical analysis tool Bollinger Bands, highlighted a worrying
pattern in the Litecoin market. He remarked, “I was asked for an
analysis of LTCBTC. The thing that concerns me the most is its
underperformance vs Bitcoin. From a price perspective the
controlling LTCUSD feature is the 2 bar reversal at the lower
Bollinger Band which is typically considered a bearish signal by
traders.” Bollinger’s Bearish Litecoin Prediction Explained The
chart of the LTC/USD pair provided by Bollinger on November 28,
2023, shows Litecoin’s price action in relation to its Bollinger
Bands on both a daily and weekly scale. The price is currently
hovering around $69.566, which is significantly lower than the
upper Bollinger Band, suggesting a lack of bullish momentum.
Related Reading: Litecoin Sustains 4-Month Run With 37% Gain,
Beating Most Of Its Peers – Details The Bands form by plotting a
range of standard deviations above and below a simple moving
average, commonly enveloping the price action. In this chart, the
daily vs. weekly candles chart shows that the LTC/USD price is
struggling beneath the midpoint of these bands, which is a bearish
indication. The price currently near $69.566 is substantially below
the upper band level of around $90, which represents a potential
resistance level. The Bollinger Bands (BB) on the chart are set
with a 20-period moving average with a 2 standard deviation range.
Bollinger’s analysis points to a ‘2 bar reversal’ pattern at the
lower band. This pattern emerges when a bar reaches a high
above the preceding bar but then closes below the close of that
same previous bar, hinting at a possible reversal from the uptrend.
Such a pattern took place near the lower band, indicating that any
effort to drive the price higher meets with resistance, and the
prevailing selling pressure is taking hold. Related Reading:
Litecoin Whales Are Back In The Game, Can Price Reach $100? The
Bollinger %B indicator is also crucial here as it compares the
price of Litecoin to the range defined by the Bollinger Bands. A %B
value below 0.5 indicates that Litecoin’s price sits nearer to the
lower band than to the upper band, potentially signaling weakness.
The chart shows the indicator failing to cross the 0.5 level after
a plunge toward 0, signifying that the price frequently touches or
falls below the lower band. LTC Price Under Pressure The Bollinger
Band Width (BBW) serves as another indicator, measuring volatility
by assessing the Bollinger Bands’ width. A narrowing of the Bands,
as seen in the latter part of the chart, suggests a decrease in
volatility and often precedes a significant price movement. In this
context, the BBW’s narrowing on the Litecoin chart might indicate
that the market is tensing, possibly gearing up for an impending
breakout or breakdown. When Bollinger mentions Litecoin’s
underperformance relative to Bitcoin, it’s important to note that
Bitcoin often leads the crypto market trend. If Litecoin is not
keeping up with Bitcoin’s movements, it could suggest a lack of
confidence or interest from traders in altcoins (as the current
rise in Bitcoin dominance shows) and Litecoin specifically. In
summary, Bollinger’s technical analysis indicates that Litecoin is
in a precarious position. The price action at the lower Bollinger
Band, the bearish ‘2 bar reversal’ pattern, the sub-0.5 Bollinger
%B values, and the narrowing BBW all suggest that Litecoin may
continue to see downward pressure in the near term. At press time,
Litecoin traded at $70.05. The 1-day chart of LTC/USD shows that
the altcoin fell below the key support of the 0.236 Fibonacci
retracement level at $69.98 two days ago. A retest is currently
taking place, a daily close above this is of utmost importance for
the Litecoin price. Featured image from Unsplash / Kanchanara,
chart from TradingView.com
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