Total Market Capitalization Chart
Above: Total Market Cap Weekly Chart
The first chart I want us to take a look at is the weekly chart for the Total Cryptocurrency Market Cap. This isn’t too different from a recent article, but I want to keep this point fresh in our minds: The Total Market Cap chart has not tested the weekly Kijun-Sen since April 2020. The current weekly candlestick has test the Tenken-Sen, but we still have not seen a good test lower. I would expect to see the entire cryptocurrency market trade sideways until the beginning of March before we see the true drive and ultimate push to test lower prices. But watch for this kind of a scenario to play out on the weekly chart: Look at #1 on the Composite Index and not the location of the current CI line (red). If that line drops below the prior low at #2 and the weekly price level is at or near the Kijun-Sen, watch for a big spike higher.
Above: Litecoin (LTCUSD) Weekly Chart
Litecoin has a trifecta of conditions in its oscillators that point to some imminent downside pressure on the weekly chart. #1 shows us that the RSI has broken below a prior trendline and is likely to continue lower. #2 shows the Composite Index line read to break its trend line. And #3 shows the %B line is about to cross below the 0.8 level. For a confirmed sign of bearish movement, we need to see #2 and #3 fulfill their crosses. I put a vertical line on the price chart (#4) to show where the future Kumo Twist occurs. A Kumo Twist is an event where the future Senkou Span A crosses the future Senkou Span B. A Kumo Twist is often a time period where trends changes or corrections occur. If, around the week of May 3rd, 2021, Litecoin has been trending lower, we could expect to see the resumption of an uptrend around that date.
Stellar Lumens (XLMUSD)
I haven’t written about Stellar for a while, so I thought I’d take a look at its chart. The weekly chart is very similar to Litecoin’s, so let’s look at the daily chart. There is a key short opportunity to watch out for when the Lagging Span (#1) drops below the candlesticks and price (#2) drops below the Cloud. The ideal short entry is when price is below the Cloud and the Lagging Span is below the Cloud as well as below the candlesticks. But be careful about pulling the trigger on that short. The RSI has dropped below the two oversold levels at 65 and 55 and could be setting up for a short term bearish environment. But the Composite Index is the one we’ll want to watch for. If the Composite Index’s line (red, #3) crosses above either its fast average (green) or slow average (yellow), then we may just see a resumption of the uptrend. This is especially true if the CI crosses above one of its averages and price action is still above Senkou Span B (bottom of the Cloud). However, if the Lagging Span and price are below the Cloud, and the RSI is still above 40, and if the %B then crosses below the 0.2 level – watch out. We might see some rapid selling pressure occur.
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