January 14, 2022

Crypto Watchlist: Short Setups on LTC & BNB?

 The crypto markets are in bounce mode, but is this really a return to the longer-term uptrends?


We’ll see, but for those who are skeptical, here are a couple of quick technical setups in Litecoin (LTC) and Binance Coin (BNB) to check out for potential short-term plays in longer-term downtrends.


LTC/USD: 4-Hour

Litecoin (LTC) is a great crypto asset to check out when looking to play broad market sentiment, due to the fact that there really aren’t blockchain fundamentals or narratives to really be concerned with. It’s just a simple layer-1 blockchain system similar to bitcoin (it’s actually a fork of Bitcoin’s codebase); just a little bit faster and with a larger token supply. So, price action generally follow’s broad market sentiment and bitcoin’s price action, meaning, which ever way the market goes, LTC is generally tagging along.



And that’s been case for LTC/USD over the past few months, falling big time with the rest of the crypto space after hitting the $300 handle back in November. And if you believe that the pain ain’t over yet for the bulls, then this week’s bounce from $121 to $142 could be your chance to get bearish on crypto in general.


At the moment it looks like a potential resistance area is forming around the 38% Fibonacci area and broken previous support area around the $144 handle. We’ve also got stochastic signaling potentially overbought conditions, and with all put together, this may be enough to entice technical bears to jump back in for a short-term swing play in the longer-term downtrend.


BNB/USD: 4-Hour

Binance Coin (BNB) also fits the bill and is actually a market we scoped out back in early December as one to potentially play if crypto markets continued to slip. We called it a dead cat bounce, and pointed out a potential scenario where a downside break of a rising wedge may draw in more sellers.


That looks to be how it all played out as crypto markets did continue to sour in December as hawkish central bank rhetoric did ramp up. BNB/USD fell from $570 to $500, where it found temporary support before breaking lower to nearly hit the $400 handle before this week’s bounce.


Again, if you’re still bearish on crypto, BNB/USD is market to check out for a potential short-term swing move. Not only are we seeing technical arguments of potential resistance/reversal forming (e.g., stochastic overbought, momentum slowdown at previous broken support/major psychological level), but fundamentally, Binance chain seems to be losing ground in total-value-locked (TVL) to other layer-1 chains like Terra, Avalanche and Solana.



Binance is still a monster chain with almost $20B in TVL, but odds are that it won’t attract capital like it did in early 2021 with these new kids taking their pieces of the pie, raising the odds that this downtrend in BNB price may continue.


But what do you all think? Is LTC or BNB buy or sell?