Review candle patterns to evaluate Litecoin (LTC)
Cryptocurrencies have been a high visible and unstable asset class in recent years, and many investors have tried to exploit growth potential. These cryptocurrencies include Litecoin (LTC), an open peer-to-peer cryptocurrency that has gained popularity among both traders and investors. In this article, we will examine how to use candle formulas to evaluate Litecoin performance and make informed business decisions.
What are candle patterns?
Candle patterns are a form of technical analysis used on the stock market and a cryptomena analysis to identify potential trends or reversal of prices movements. These formulas consist of a series of vertical lines that represent high, low, open and close prices for each business day. By identifying specific candle patterns, traders can get a view of the direction and strength of the trend.
Litecoin (LTC) Candle patterns
Litecoin has gone through several trends in recent years, with the price of cryptocurrency ranging from $ 40 to more than $ 300 per coin. To evaluate the performance of LTC using candles patterns, we focus on four key patterns:
- Hammer pattern
- Inverted pattern of hammer
- Shooting Star Pattern
- Inverse head and shoulder pattern (IHS)
Hammer pattern: bear indicators
The hammer pattern consists of a small lower high level, followed by a small upper minimum. This model is considered a bull indicator because it suggests that the price has reversed its trend, suggesting a potential price increase.
Apply the hammer pattern to Litecoin’s graph:
- Identify the new minimum in the chart.
- Draw a small lower height below the previous low level.
- If another candle closes over this new minimum, the pattern is confirmed bull.
Inverted hammer pattern: bear indicators
The inverted hammer pattern is similar to the traditional hammer pattern, but has the opposite direction. It consists of two short lower highs, followed by small upper highs. This model is considered a teddy bear because it suggests that the price has reversed its trend, suggesting a potential reduction in prices.
Apply an inverted hammer pattern to Litecoin Graph:
- Identify two new low points in the chart.
- Draw a small higher high above the previous low level.
- If another candle is closed under this high, the pattern is confirmed by bears.
Firing pattern: bear indicators
The shooting star pattern consists of three lower minors, followed by one upper maximum. This model is considered a teddy bear because it suggests that the price has reversed its trend, suggesting a potential reduction in prices.
Apply a shooting star pattern to the litecoin chart:
- Identify three new low points in the chart.
- After each lower low level, draw the upper part high above the previous intervals of candles with a low point 10-20.
- If another candle closes below this upper level, the pattern is confirmed by bears.
Pattern of inverse head and shoulders (IHS): bear indicators
The IHS pattern consists of a small high high high level, followed by low. This model is considered a teddy bear because it suggests that the price has reversed its trend, suggesting a potential reduction in prices.
Apply the IHS pattern to Litecoin Graph:
- Identify a new lower height in the chart.
- After each previous high high level, draw the upper part high above this low point of 10-20 candles intervals.
- If another candle closes below this upper level, the pattern is confirmed by bears.
Conclusion
Cryptocurrencies, such as Litecoin, are subject to a significant fluctuation of prices and understanding candle patterns can help traders and investors make informed decisions.
