Consolidation Range: Litecoin has been trading sideways so far this week. The 1H chart shows that coming out of the weekend, ltcusd started to trade between 1.42 and 1.48 with price oscillating and mostly sticking around the central pivot of 1.45.
The dynamics of the moving averages and the RSI in the 1H chart also reflect a sideways market in the very short-term. Which way will litecoin break out this week?
Litecoin was bearish until it tagged 1.30 late April. After that it rallied back to 1.50 and has been forming an ascending triangle since. Now, we asked which way will litecoin break out from this week’s 1.42-1.48 consolidation range. We can see that after the breakout, there is still resistance at 1.50 and support around 1.40.
Bearish Scenario: A break below 1.40 can bring pressure back to the 1.30 low. This scenario could be part of a larger scale bearish continuation that still has the 1.00 low on the year in sight.
Bullish Scenario: A break above 1.50 would put in a price bottom with the current triangle consolidation. This would put pressure no the 1.60-1.62 area, which is where price pivoted from when it spiked down to make the 1.00 low on the year earlier in April. Note that if price bounces off the 1.40-1.42 support area, it will also have provided a “bullish slingshot” signal.
While we should be aware of the bullish development in the 1H and 4H charts, we should also remember that th daily chart is still bearish. Price is still under the 200-, 100-, and 50-day SMAs, while the RSI is still holding under 60. So, we should really wait until a break above 1.50 to give us a bullish outlook, and even that bullish outlook should first be limited to the 1.60-1.62 area. Further evidence of support at or above 1.40 might be needed to convince the market of a stronger bullish outlook.
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