Litecoin Aproaches Resistance; ABC Correction Scenario

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Litecoin Aproaches Resistance; ABC Correction Scenario
Litecoin at Resistance; ABC Correction Scenario
Litecoin at Resistance; ABC Correction Scenario

LTCUSD has been consolidating since hitting 9.14. The 1H chart shows a classic consolidation that has a breakout pending.

LTCUSD 1H Chart 7/21LTCUSD 1h chart 7/14

 

(click to enlarge)

1) The moving averages in the 1H chart have converged, and shows the market has been directionless since retreating from 9.14.
2) There is bearish bias in the 1H chart as price trades below the 200-hour SMA.
3) The RSI reflects no directional momentum.
4) Price fell below a rising trendline from last week, giving us some more bearish signals for the short-term.

As price approaches 8.7, we should keep in mind the market is neutral to slightly bearish, and if this mode continues, we should look for sellers because:
1) A falling trendline from the 9.14 high.
2) The broken support line that might act resistance.

Watch for the RSI to tag 70. And if it provides a bearish divergence, anticipate another bearish swing toward last week’s low around 8.2. A slightly more aggressive bearish outlook for the short-term is an ABC correction scenario, with a C=A projection targeting 7.95.

Without a prevailing bearish trend, the bearish outlook should be limited, and we should look for buyers in the market especially if the 1H chart falls to oversold levels (below 30).

When you look at the 4H chart, you can see the market at the cross road. After a dip to 2.21 at the beginning of the month, LTCUSD has been trying to claw its way back up, but is now challenged by the 200-period SMA in the 4H chart. But other than that, it looks like it is building up bullish a bullish outlook:

LTCUSD 4H Chart 7/21
ltcusd 4h chart 7/21

(click to enlarge)

1) The RSI has tagged 80 and is so far holding above 40. The ability to hold above 40 now can show maintenance of the bullish momentum.
2) If price pushes back above 9.0, it will clear the past couple week’s falling resistance, and the 200-period SMA in the 4H chart. IF the RSI pushes above 60 as well, we should be looking at a bullish continuation.

While the short to medium term outlook seems to be one step away from becoming bullish, the near-term outlook still remains bearish as long as price is below trendline seen in the 4H chart. But this bearish outlook can be shelved if price pushes above 9.0 as I mentioned. Then the focus should shift toward the 10.00 psychological mark, and this past 2 week’s of price action should provide a base or support for the next upswing.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
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