LTCUSD update: Price is cascading to bargain basement levels as these markets follow the extreme sentiment driving BTC. This is not surprising, since the short term bearish structures have been maintained. Instead of reacting though, this is a time to pay close attention since extreme prices offer rare and unusual opportunities for long term investors with courage and vision.

Extreme Means Emotional

When large bear candles appear at a major low, it is often a sign of the weakest of weak hands letting go of their coins. Presently, the 71.80 level is the most relevant reversal zone boundary and a very extreme price. And as you can see, there is a large range candle that established a low of 73.29. And it may be closing as a pin bar which is a bullish reversal sign.

As BTC slides, this market is overreacting in my opinion. BTC was below 6K, but it can go as low as the mid 5600’s or even the high 4900s before providing some evidence that weakness will continue over the long term.

Which means LTC is being pushed much further than it should be. Andrew noticed this unique discrepancy also and wrote an article about a creative way to capitalize on it which you can read here.

Listen To Common Sense, Not People

There is so much noise out there, screaming for everyone’s attention during these dramatic moments. Every level of media producer is going to be looking to capitalize on this situation in terms of eye balls. They are not really offering any information that will help.

The only sources of information that offer any value are your charts and your common sense. At extreme lows, like LTC at 73.39, probability or potential that price will continue lower is dramatically reduced. The reason is at extreme prices, whether it is a top or bottom, the herd exhausts itself. Once the weak hands are out, there is no one left to sell (in a figurative sense). And that is what is happening in this market especially around the 71 level.

In terms of sentiment, we are at the polar opposite of when these markets were at their peak. Nothing on your chart will tell you this. Only common sense and familiarity with best practices. The key is to think like a lone contrarian, not a member of the herd.

Two Ways To Play

Technical structures in this market are still bearish and will remain so for an unknown time. The bearish trend line around the 90 level needs to be taken out, followed by the 117 resistance level (adjusted .382 of the recent bearish swing).

Litecoin: Extreme prices are where opportunity is found, not obvious prices.

The aggressive way: If you are a strong hand, or have not invested any money, now is a great time to get extreme low prices. Buying small is key because again, BTC still has room to go lower which means this market can reach very concerning levels. Keep in mind, a close below the 71 reversal zone boundary will prompt us to stop any further buying until proven stability returns.

The conservative way: Like many, you have aggressively invested much earlier and are waiting for these markets to recover. These extreme lows still offer an opportunity, but before cost averaging your position, you can wait until the bearish structures are cleared. That means waiting for 117 to be compromised before adding.

Waiting for 117 to be cleared means you must sacrifice the extreme low prices that are available now, and much of the attractive prices leading up to the break. More “safety” or less risk does have an opportunity cost. Just like when you bet on a horse with a high pay out, it is a riskier bet. The horses with the low payouts are the favorites, which means they are the obvious picks and the majority of the crowd is betting on them.

It is not hard to see the fundamental value, or learn about it, it is just a matter of having the vision and the courage to embrace the risk. These aren’t horses, they are real technologies that solve real problems and have merit.

Avoid The Obvious

When everyone thinks the same thing, that means it is time to change. When the main stream media, your Twitter experts and your favorite bloggers are all saying the same thing, that is a reflection of the herd. This is no different than the shoe shine boy offering hot stock tips 100 years ago. Or your mother sporting the same hair style as you.

Whatever you decide, do not take action as a result of someone else’s opinion. If you have the money to invest and can afford the risk, these are opportune markets for strong hands. If you are all in and are waiting for recovery, that’s okay too, just watch and learn. Either way, this is the worst place to be converting coins back to dollars. It may be ugly, but the ugliness of the lows is where the opportunities are, not in the glamour of the highs.

Questions and comments welcome.

3 Responses
  1. Fons Goudsmit

    Thank you Marc from Holland here.
    I bought some LTC for BTC yesterday, according to Andrews suggestion when BTC was doing €5268. so my price was about €71.00 Euros(!)
    INow I wait for further movement up or down.
    In another post some time ago Andrew told us Cryptos with very low prices tend to react much faster.
    I have a nice little stock of XLM lying around and I plan to shave off some to sell some BTC when this thunderstorm is over.
    And if LTC goes down even further I shall look to buy some more LTCBTC
    You people are always telling to have a plan. Here is mine.
    This technology is here to sTay!
    Please leave a comment 🙂
    Gr/Fogomatic
    P.s. as a newbie I learned a lot from you ebook too.

    1. Barry Kidd

      I can confirm having very good success trading back and forth between LTC / BTC. I do it a lot. It’s fairly predictable. It’s a very good way to add coins, while always staying in Crypto. You don’t want to be in Fiat when any big increase happens, as it can happen really fast and you may miss it. Most of the annual increases in Crypto happen during a small percentage of days during any given year. You need to stay at least 70% in crypto always.

      BK

  2. dwk8081

    One of your best comments yet Marc … definitely keen to pick up some more around here and HODL. It will be great looking back in 2 to 3 years time and know we pick up a bunch of LTC at these levels.

    Nice work …

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