A Detailed Breakdown of Litecoin‘s Four Year Cycles
Here is the Bitcoin Four Year Cycle that I have discussed in previous newsletters:
And if we zoom out to the twelve-month timeframe for Litecoin…
We’ll notice that the price chart is a spitting image of the Bitcoin 12 month chart.
And just like LTC/USD is lagging behind the price action of ETH/USD…
The Litecoin Four Year Cycle
Let’s dissect the Litecoin Four Year Cycle.
Candle 1 is arguably the most exponential phase in the Four Year Cycle where LTC/USD reaches a new All Time High.
Candle 1 is then followed by Candle 2 where a Bear Market correction occurs.
Interestingly, Candle 2 retraced -92% in both LTC 4-Year Cycles.
Candle 3 then follows which figures as the bottoming out candle.
Then comes Candle 4, which doesn’t eclipse Candle 3. In fact, Candle 4 forms a Lower High relative to Candle 3.
That said however, the bottom of the candle body of Candle 4 successfully turns the top of the candle body of Candle 3 into a new support to form a Higher Low.
This forms the very beginnings a of macro U-Shaped bullish reversal formation that precedes a new Candle 1 to begin a new Four Year Cycle for LTC.
The Multi-Year Downtrend…
Candle 1 plays a crucial role in the Four Year Cycle for Litecoin.
It is the first candle in four years to be able to break the multi-year diagonal resistances that has figured as a serious point of rejection for price.
This break of the multi-year trendline is what propels Litecoin to break its old All Time High (i.e. the ATH that was set in the previous Candle 1) and enter price Discovery in search of a new All Time High.
Bitcoin also has a multi-year trendline resistance that consistently rejects price throughout its own Four Year Cycle:
That is, this trendline acts as a resistance to Bitcoin’s price for three years, where Candle 4 is the candle that breaks the diagonal; for Litecoin, this trendline is broken after four years in Candle 1.
Key Four Year Cycle Levels for Litecoin
Let’s build on the insights mentioned earlier in the context of key Four Year Cycle price levels for Litecoin:
Throughout an entire Litecoin Four Year Cycle, price tends to maintain a consistent support (i.e. green level) throughout the years before finally taking off.
The First Litecoin Four Year Cycle (2013-2016)
For example, in the first Four Year Cycle for Litecoin, ~$2.70 figured as a pivotal support (green) which Candles 1, 2, and 3 maintained (though not without some downside volatility in the form of wicks).
Crucially, Candle 4 forms a Higher Low relative to the ~$2.70 support then turns the top of Candle 3 into new support upon the twelve-month candle close.
More, this Higher Low continues into Candle 1, whereby Candle 1 turns the top of Candle 4 into new support before spring-boarding into a new explosive uptrend.
The Second Litecoin Four Year Cycle (2017-2020)
In the second Litecoin Four Year Cycle, price rallies to never-before-seen All Time Highs.
Candle 2 then forms and corrects -92%. In doing so, LTC produces a downside wick into the red horizontal level of ~$23.70 to turn this level into a new support.
After all, this very price level acted as a resistance in the 2013-2016 Four Year Cycle, specifically in Candles 1 & 2 of that cycle.
However, Candle 2 of the 2017-2020 cycle manages a candle close above the green horizontal level which was the previous resistance in Candle 2 of the previous 4-Year Cycle.
In sum – a new Candle 2 turns the top of an old Candle 2 into new support.
And in fact – the Candles 3 and 4 that follow continue to hold this new support (whereby the candle-body of a Candle…