Bitcoin, Litecoin Settle in Large Triangles

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.

 

Petar Kotevski

Petar is a forex trader and writer with 9 years of experience in financial markets. He has been following bitcoin since 2010. A year ago, as the BTC market matured, he started getting more involved by writing articles on bitcoin and other alternative currencies.

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