Written by Hazel J. Greene, Senior Analyst

Bitcoin and Ethereum have long been regarded as the leading cryptocurrencies by market cap. However, recent analysis indicates that Litecoin (LTC) and XRP could potentially surge ahead, supported by a “parabolic” high timeframe signal that is characterized as the Parabolic SAR.
The parabolic SAR is a technical indicator used to determine the price direction of an asset, as well as draw attention to when the price direction is changing. Sometimes known as the “stop and reversal system,” the Parabolic SAR was developed by J. Welles Wilder Jr.

Cryptocurrencies are known for their striking parabolic rallies, often followed by sharp reversals. Identifying these trend shifts is crucial for successful trading in the crypto market.

A closer examination of the 1M timeframe reveals that only LTCUSD and XRPUSD have triggered the Parabolic SAR. This suggests that the downtrend in these altcoins has halted, indicating potential market reversals. It is intriguing to note that Litecoin and XRP, despite not reaching new all-time highs in 2021 like Bitcoin and Ethereum, have already sparked this trend change. The relatively longer drawdown experienced by LTC and XRP sellers, along with their historical outperformance compared to BTC and ETH, could partially explain why these altcoins are leading the market recovery.

Bitcoin and Ethereum have yet to trigger the Parabolic SAR signal. For BTCUSD, the price needs to reach nearly $42,000 per coin, while ETHUSD should trade above $3,300. In contrast, Litecoin and XRP have already surpassed these levels, causing the SAR to move below their price action. Traders can leverage this tool by setting a trailing stop loss based on the SAR indicator. This stop loss order effectively protects the trader’s position, ensuring an exit point when the probability of a trend reversal becomes higher.

While Bitcoin and Ethereum have dominated the crypto market, the recent Parabolic SAR signal indicates that Litecoin and XRP might take the lead in the near future. This unexpected turn of events underscores the complexity of market dynamics and highlights the importance of technical analysis tools. As traders observe the continued development of this trend in the coming months, it will be intriguing to witness how Litecoin and XRP shape the landscape of the cryptocurrency market.

Disclaimer: The information provided in this research report is for informational purposes only and should not be interpreted as financial or investment advice. The cryptocurrency market is highly volatile, and readers should conduct thorough research before making any investment decisions.