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And the Crypto Winner is: Monero!

1. Methodology

In an analysis posted two days ago we reviewed the price charts of all cryptocurrency to US Dollar pairs tradable on Kraken and identified several potential breakout configurations. Some of the cryptocoins considered appear stronger but the picture may not be completely clear about which currency to invest into for the medium term (i.e. for at least the next few weeks). In the present analysis the relative performance of currency pairs is charted via their price ratio.

Note: The present article was posted one day after its redaction was started in which time frame the crypto coins have made large price swings, which are not accounted for on most of the price charts presented.

2. Is Litecoin the strongest crypto?

2.1. Litecoin outperforming Bitcoin

On August 25th we mentioned that Litecoin was going to outperform Bitcoin until October and based on this expectation we recommended to go long Litecoin.

LTCBTC Daily Price Chart – 25 August 2017

Two weeks later and the ratio has crossed the charted channel and almost reached the proposed 0.02 target before receding as displayed on the updated chart:

2017-09-08_LTCBTC_Weekly

LTCBTC Weekly Price Chart – 8 Sept 2017

2.2. Another Litecoin Breakout Higher

On August 23rd we also identified a potential breakout situation on the Litecoin price chart and recommended to buy it shortly before it happening:

2017-08-23_LTCUSD_Breakout

LTCUSD Breakout Potential – 23 August 2017

The updated Litecoin price chart with the original triangle configuration now indicates that the LTCUSD price has soared from $50 to a new historical price peak at $95:

2017-09-08_LTCUSD_Weekly

Litecoin weekly price chart – 8 Sept 2017

The question is now, should we stick to our Litecoin investment or look elsewhere for another, stronger cryptocurrency?

2.3. Relative Performance of Litecoin

As already mentioned in $2.1. here above Litecoin is clearly outperforming Bitcoin, but how does it perform compared with other currencies.

Litecoin is clearly stronger than Ethereum as per the weekly price chart:

2017-09-08_LTCETH_Weekly

LTCETH Weekly Price Chart – 8 Sept 2017

It is as well clearly stronger compared with Tether:

2017-09-08_LTCUSDT_Weekly

LTCUSDT Weekly Price Chart – 8 Sept 2017

But the surprise arises when comparing Litecoin with Monero, whereas the ratio has recently flashed a bear signal (cross-over of the moving averages) and the price is capped below the descending 7-period moving average. Therefore the odds are in favor of the ratio to continue its decline towards the blue support line for the least:

2017-09-08_LTCXMR_Weekly

LTCXMR Weekly Price Chart – 8 Sept 2017

Broadening the time span it is also observed that Litecoin has historically been ‘sold’ against Monero, and the broadening formation formed by the blue and red lines is a shape typical for consolidation patterns, meaning that the probability is higher for the price to continue its decline and to break below the support line.

2017-09-08_ETCXMR_WeeklyLarge

ETCXMR Weekly Price Chart

Wherever the price ratio moves in direction of the support line or breaks below it Monero is expected to outperform Litecoin to a large extent over the next few weeks at least.

Unfortunately there are no possibilities to compare the relative performance of Litecoin versus over cryptocoins such as Dash, Ripple or Bitcoin Cash (which recently crashed compared with Bitcoin in the immediate aftermath of the Bitcoin fork on August 1st).

3. Monero, the clear performance leader

It therefore appears that Monero is presently the strongest coin within a small basket of uptrending cryptocurrencies constituted of Bitcoin, Ethereum, Litecoin and USDT – with no comparison being possible, or price history not relevant for comparison, with Dash or Ripple.

How should investors take advantage of this strength?

In the analysis posted two days ago we suggested a way to play a potential breakout if the price were to reach $127, which it did shortly thereafter but which ended up as a headfake (a false breakout) with the price reversing lower:

2017-09-08_Monero_Headfake

Monero False Breakout

Of course, as has been warned in the same article in which it was proposed to buy this breakout: “Whenever a buy suggestion is made always use a stop-loss order to protect your capital”, which surely would have applied here to minimize a potential loss unless the investor is confident enough to wait for the price to recover and move higher again.

Following this reversal the price plummeted and precisely reversed on the ascending daily support.

If investors are not yet in position and from the technical situation that is playing out now, then the strategy that applies should be as proposed here below.

3.1. Buy The Support Strategy

Monero price is attempting a bounce on the rising support that has been identified previously. It may therefore be a good idea to buy any weakness from here with a stop-loss order below the trend line + bottom of indecision candle.

Monero Buy Strategies

3.2. Buy The Breakout Strategy

The other option is to wait for the price to catch up with the upper resistance and to buy the break-out above it and the top of the indecision candle, which is $135. Therefore the stop entry order should be around $136. We will update in due time via Twitter with a strategy follow-up whenever this happens. The SL order will need to be adjusted as soon as the buy order is executed.

3.3. What If Scenario

Whenever the price of Monero breaks below the rising support line, then the strategy to go long will need to be reassessed.

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