Aggressive Cryptocurrency Buy Signals
Point and Figure, contrary to popular belief, does allow for some extremely strong and low risk aggressive entries based on specific patterns. Many cryptocurrencies are currently in a position for aggressive buy entries.
Spikes and Poles
One of the great benefits of Point & Figure is the unambiguous nature of its entry rules, especially on a 3-box reversal chart. The aggressive entries are one of the only subjective forms of analysis in this chart style. The reasons for this are because the definitions of what determines a Spike or Pole pattern can be varied; this is especially true for a Pole pattern. Spike patterns are any columns that have 15 or more boxes in them, but Poles are naturally long columns that are above average and appear at the end of a swing. Spike patterns are the more aggressive of the two where entry occurs immediately on the reversal. Entries on the Pole patterns occur when price moves beyond 50% of the Pole pattern.
Litecoin has a very bearish looking Point & Figure chart. There was a Spike pattern that formed from $63 down to $43, followed by a small recovery. Currently, Litecoin has a Pole pattern. 50% of the range of the current O column is $42, so the entry would be one box above at $43.
Buy Entry Signal: $43
Cardano’s current chart shows the most recent O column is a Spike pattern, but it is also within the same extreme range we would see on some of the other large sell-off columns in Cardano’s history. Instead of treating it as a Spike pattern, I am treating it as a Pole pattern. 50% of the range of the O column is at $0.03425, so the entry would be at $0.0345.
Buy Entry Signal: $0.0345
Stellar Lumens (XLM)
Stellar has one heck of an ugly Spike pattern on its chart. Stellar has easily been one of the worst-performing altcoins since the start of the Altpocalypse in January 2018. This current, new all-time low that Stellar generated has created a massive Spike pattern. Spike patterns are often associated with swing reversals. The fact that Stellar has been in such a long downtrend and then has this Spike pattern appear can mean a very violent corrective move could be around the corner. The entry on the Spike pattern is right when the reversal column of Xs forms at $0.46.
Buy Entry Signal: $0.46
Ripple’s chart looks very familiar to Stellar’s chart. Ripple is right on the edge of what you might consider either a Spike or a Pole. I’ve considered this a Pole pattern, so I am waiting for Ripple to move beyond the 50% range of the O column for entry at $0.25. While I am not a massive fan of Ripple, from a price action perspective, I can’t deny the highly probable price spike (pun not intended) that would occur if Ripple can get to the entry at $0.25. I have a resting buy stop at the conservative entry point at $0.32, but there may be enough momentum for Ripple to move beyond the 50% mark and then burst through the dominant downtrend angle.
Buy Entry Signal: $0.25