Cryptocurrency Point & Figure Buy Signals
Point and Figure Charts are, to borrow from Jeremy Du Plessis, an unambiguous charting style. It is a price action traders purist chart form.
Believe it or not, the massive column of Os on the chart is a pattern. A large column of Os is known as a pole – and poles are indicative of being reversal setups. The interpretation is always an issue because it’s very subjective. However, there is little to be subjective about – this column of Os is most definitely a pole. Why? Because it is the single largest percentage loss column on this chart’s history. We are, literally, looking at the single most bearish bear column in Litecoin’s history! I admit to being kind of surprised when I was doing the analysis, but it is the worst by far at a -31.17% drop. The question is: So where is the entry? In a pole pattern, the entry is when price moves above 50% of the range of the column of Os. For Litecoin, that would mean a return to $65.00 would fulfill the entry requirements.
Ethereum actually has two entry signals that I am looking at. First, is the aggressive entry at $190.00. The entry at $190 is a break of the 50% range of the current column of Os. The conservative entry rests above at $225.00 and would fulfill the entry rules by forming a break of a double top that would form at $220.00. For those who are interested in shorting, there is an option for that as well (not shown on the chart though). The short signal is actually directly on $160 because it broke the double bottom formed at 165. If price moves all the way to the conservative entry, then we also have a confirmed bear trap on the chart and should expect to see some significant moves higher.
While the current column of Os is extremely bearish and what I would consider as a pole pattern, it is not the biggest drop for Bitcoin. The biggest percentage drop for Bitcoin occurred last fall with column that began on September 18th, 2018. That drop was a shocking -55.56%. The current column of Os is the biggest percentage drop since the Sept 2018 fall. Finding the entry for Bitcoin’s current pole pattern is the same method that was used for Litecoin’s chart. A break above the 50% level of would constitute and entry, and that occurs at $9400.
Out of the four cryptocurrencies in this article, Cardano is the hands-down worst performer. This current column of Os first printed on June 27th – so we’ve spent 90 days inside this current column. And during those 90-days, Cardano has lost a shocking -61.90% from the open of the column. It’s almost hard to believe that Cardano was trading at $0.10 in June and we are now in the $0.03 value area. But Cardano has been one of the worst-performing cryptocurrencies in the top 20 market cap. Treating this current column as a pole pattern, the entry is at $0.075. I am paying special attention to the major resistance that sits between $0.11 and $0.10. There is a possibility that when a new column of Xs forms, we will have a confirmed higher low which could be the confirmation swing that leads to a new bull market.