Bitcoin and Ethereum might be the two largest cryptocurrencies by market cap, but according to a higher “parabolic” timeframe signal, Litecoin and XRP could soon lead the market higher.
The lack of technical utility powering in BTC and ETH suggests that these two top contenders may lag behind lower-ranked altcoins. Here’s a closer look at why.
Parabolic SAR explained in cryptography
Cryptocurrencies are known for their impressive rises, which subsequently lead to prices reaching overvalued amounts. When the parabola breaks down, the trend tends to reverse into a brutal bear market. Understanding when these changes in trend occur is key to making a profit in the crypto market.
Certain tools are designed for just this purpose. For example, the Parabolic SAR tells a trader when a trend has “stopped” and “reversed”. Created by J. Wells Wilder, Jr. , and is the parent of many popular technical tools, such as the RSI, Average True Range, and more.
Using this tool on 1M timeframe across top crypto assets ranging from Litecoin to XRP, and Bitcoin to Ethereum, it shows that LTCUSD and XRPUSD are just two Parabolic SARs. Depending on the instrument’s design, this should mean that the downtrend in these assets has stopped and reversed.
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Why Litecoin and XRP could lead to Bitcoin and Ethereum
Litecoin and XRP driving the recovery of the cryptocurrency market is quite unusual. Bitcoin and Ethereum hit new all-time highs in 2021, while LTC and XRP did not. This may contribute to triggering the signal earlier than BTC and ETH.
LTC and XRP sellers could be significantly more exhausted after suffering a much longer pullback from all-time highs. Both altcoins significantly outperformed Bitcoin and Ethereum in 2017, so the scenario isn’t out of the question — it’s not something we’ve seen in six years.
For Bitcoin and Ether to trigger the same signal, BTCUSD would need to reach close to $42,000 per coin, while ETHUSD would need to trade above $3,300. These targets are still far away, compared to Litecoin and XRP which has already caused the SAR to move below the price action.
At this point, the tool can be used to set a trailing stop loss, and place a stop loss order at the SAR indicator. When it is flagged, it stops the trader at a point where there is a higher probability that the trend has stopped and reversed.
# Litecoin And #XRP Each tag is marked with its monthly SAR equivalent# Bitcoin And # ethereum did not
I expect LTC and XRP to lead pic.twitter.com/om0YDQGKBq
– Tony “The Bull” (tonythebullBTC) July 20, 2023