Today we are going to revisit my projection for Litecoin since the start of August and elaborate further on the next probable major market move as Litecoin usually is the first to bring clues in the significant trend shifts and I often refer it as a leading indicator for Bitcoin. Second, we are going to look at another major altcoin like EOS as its price chart shows significant similarities.
We have started the month with the expectations of the price of Litecoin to make a more significant ABC correction as the 4th wave from the five-wave impulse to the upside after which an increase to the $61 level area was expected.
The price came up to those levels slightly above at around $65 without a significant ABC correction. After it spiked to the upside an impulsive downside move was made of a significant amount which indicated that the prior five-wave move count was of a lower degree one and that the 4th wave previously expected is yet to come.
This is why another projection was made on the 6th of August which encompassed the 4th wave being the previously expected higher degree one, comparing the prior lower degree 3rd wave fractal to the projected one. The 4th wave was expected to retest the horizontal support at $51.6 and the completion of the 5th wave was to develop slightly above the prior high at the 1.272 Fibonacci level or in price terms at $68.52
From Mondays high when the price of Litecoin reached the projected high at $68.52 and ended its 5th wave. We have seen a decrease of 14.69% measured to the yesterdays low at $58.779 but a recovery to $63.7 followed with the price currently being traded slightly lower around the $62.24 level.
On the hourly chart, you can see that price moved to the downside in a five-wave manner which indicated impulsiveness after a higher high has been made compared to the one on the 2nd of August. As we have most likely seen the completion of the 5th wave to the upside now either a corrective one to the downside has been starting or an impulsive higher degree one.
At the moment the price is retesting the 0.786 Fibonacci level for support and is came above and below it but is likely to find support there and continues increasing as the C wave from the corrective lower degree ABC correction would be expected to develop as the three-wave counter trend move. Its target would optimally be the 1 Fib level which is the significant horizontal level from the August 2nd’s high and the Monday support now broken to the downside. So after a retest for resistance is made another five-wave impulse to the downside would be anticipated to the 0.236 Fib level or even lower, depending on whether or not we are seeing the development of the ABC correction or another higher degree impulse.
If we are seeing a corrective ABC of the Minuette count projecting the length of the A wave on to the presumed ending point of the C wave at the 0.786 Fibonacci level we come up with the target of $54.8
The price of EOS has been decreasing from Monday’s high at $3.922 to $3.27 which was a decrease of 16.31% but made a recovery since and is currently trading at around $3.4.
Looking at the hourly chart, you can see that the price made another five-wave increase from the 12th of August which was the ending wave of the higher degree. The 4th wave correction was expected to continue for a bit longer but it had ended on the retest of the significant horizontal support zone just below the $3 mark.
As support has been found, most likely we have seen the development of the ABCDE correction after which the 5th wave of the higher degree count has been made which is why now we are likely seeing the development of the correctional movement of the same degree.
If this is true, then the price is currently undergoing a local ABC which is set to bring the price a bit higher but is ultimately leading to another five-wave impulse to the downside. The most significant support in line to the downside would be the mentioned horizontal support zone below the $3 mark and the Fibonacci retracement tool aligns its 0.236 level with the upper level to whom the interaction is being awaited.
The prices of Litecoin and EOS are showing signs of extreme correlation. The index is above the 0.92 marks and looking like it found support there and starting to rise again which is why a similar outlook could be expected for these major cryptos.
We have seen the completion of the 5th wave from the impulse that started on the 2nd of July. Now there are two possibilities ahead.
In a bullish scenario, we have seen the completion of the 3rd wave from the Minute count in which case the currently expected descending move would be a three-wave one and would most likely end on a higher low compared to the one made on August 12th at $52.5. This would result in the creation of an ascending structure and another move to the upside that will lead to further increase as the 5th wave is to develop. The most significant resistance zone is at the levels of the February high around $82.94 and we could potentially see its retest before the completion of the 5th wave.
In an alternative scenario, the completion of the 5th wave from the Minuette count marked the completion of the ABC correction that started after the March 15th impulsive decline of 66.44%. If this is true then the next expected move to the downside would be the 1st sub-wave of the same degree impulse to the downside which is set to lead the price of Litecoin potential to level levels then in March.
The level which is serving as a pivot point between two scenarios is the ending point of the 1st or A wave at $50 which the price cannot enter on the 4th wave and would invalidate the bullish count if it did on the next descending move.
In either way in both cases – being the three-wave correction or the first sub-wave of the higher degree count the price is to develop an impulse five-wave. From its momentum and endpoint, we are to evaluate the probabilities and adjust the count accordingly.
Does this mean that the altcoins are going to increase at the expense of Bitcoin or decrease at its benefit, we are going to explore in the next newsletter.
Cheers and happy trading,
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