Bullish Patterns for Lisk and Waves
Bullish Patterns for Lisk and Waves
Last month, we ran a series of articles about altcoins that broke out from patterns that have kept them bearish for most of the year. A few days after the breakouts, rallies faded. It caused many to feel that the breakouts were bull traps. Many of the altcoins we covered showed signs of weakness. Some even went below the price level.
In technical analysis, breakout rallies always fade. Many assets tend to revisit the breakout price level or even breach it. What you need to look for to remain confident in your investments are continuation patterns. These structures would tell you that the pullback is temporary and the uptrend is still intact.
In this article, we look at continuation patterns for Lisk and Waves.
Lisk/Bitcoin Analysis
The Lisk/Bitcoin pair (LSK/BTC) broke out of a large falling wedge on the daily chart on August 15, 2018. This happened after bulls breached resistance of 0.00046. Because of the breakout, the pair managed to rally to as high as 0.00088636 on August 29. At that level, bottom pickers and breakout traders started to take profits. Consequently, the market pulled back.
Daily chart of LSK/BTC
Now, LSK/BTC dropped to as low as 0.000422 on September 20. As a result, many stop losses were triggered. You can infer this because of the significant rise in volume. However, those who cut their losses were badly whipsawed. The pair closed the day at 0.00051683, which is still a level above the breakout.
Seasoned traders would have instead bought the dip instead of cutting losses. That’s because LSK/BTC is forming a bullish flag on the daily chart. This is a pattern that conveys consolidation in preparation for the next move up. In other words, the market remains bullish. It just needs to establish a new base to keep its ascent sustainable.
Waves/Bitcoin Analysis
The Waves/Bitcoin pair (WAVES/BTC) took out resistance of 0.000286 on August 12, 2018. The price action triggered the breakout from the large falling wedge on the daily and weekly charts. The breakout inspired a rally to 0.000367 on August 13. At this price, the breakout rally faded as many took profits.
As heavy selling commenced, Waves/Bitcoin slid to as low as 0.00029 on September 7. This drop would have made many investors nervous. Fortunately, bulls held their ground. That’s because the market was creating a bullish pennant on the four-hour chart.
WAVES/BTC four-hour chart
After the breakout rally faded, Waves/Bitcoin range traded between 0.000367 and 0.00029. As you can see on the chart, bulls defended 0.00029 multiple times. This was a very encouraging signal. It tells us that participants are buying as close to the breakout as possible. Once the market finally realized this, WAVES/BTC exploded.
Now, WAVES/BTC appears to be in the midst of creating another bullish continuation pattern. It is very likely to explode again soon.
Bottom Line
In technical analysis, breakouts rallies fade more often than not. Many assets tend to revisit the breakout while others go below it. If you want to remain confident in your investments, look for continuation patterns. These structures tell us that the altcoin is consolidating in preparation for the next move up.
Bullish Patterns for Lisk and Waves
Reviewed by mir khaleq ali
on
05:27
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Reviewed by mir khaleq ali
on
05:27
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