Litecoin in a Bullish Correction with Strong Volume

0
90
Litecoin in a Bullish Correction with Strong Volume

Since breaking below the 6.66 support pivot, litecoin has opened up a bearish outlook in the medium-term towards 2.21. This week, it has fallen to 3.33 before finding support. Over the past 2 global sessions, litecoin has been sharply correcting last week’s decline. The 1H chart shows price pop up above the 200-, 100- and 50-hour SMAs, and the 1H RSI above 70. This shows the market has reversed a bearish trend, and established bullish momentum at least for the short-term.

Litecoin 1H Chart
litecoin 8/20 1h chart

(click to enlarge)

Note that price has also broken above the 5.00 handle, and is cracking last week’s consolidation high at 5.35. Litecoin looks poised to push toward the 6.00 handle, where price would be testing another resistance pivot from the 8/12 session, and the 100-period SMA in the 4H Chart. The 4H RSI has also broken above 60, which shows loss of bearish momentum.

Litecoin 4H Chart
litecoin 8/20 4h chart

(click to enlarge)

It should be noted that litecion’s current rally does have volume behind it, so there is a chance this can invalidate the medium-term bearish outlook toward the 2.21 low on the year. Above 6.00, the 6.66 broken support pivot could be tested as resistance. While the bearish outlook might not be valid anymore, a bullish outlook should still be limited, until price can break above 7.00.

Also, if the 4H RSI starts to hold above 40, and litecoin price starts to hold above 5.0, we can start litecoin is likely to be shifting back to a bullish outlook. If the bullish outlook is the case, there would be upside risk toward the 10.00-10.10, which is the high from June. A break above that can open up the bullish outlook even further.

Otherwise, the current medium-term mode for litecoin can be seen as shifting from bearish to a neutral one, with short-term bullish bias.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
Previous Post: GBP/USD Seeking Strength after Hawkish BoE Minutes

SHARE
Previous articleIndia’s Rupee Jumps on Confidence Budget Deficit will be Reduced
Next articleFOMC Minutes Sound Hawkish – USD/JPY Surges
Fan Yang has been a professional forex trader and analyst since 2007. He specializes in technical analysis and has a Chartered Market Technician designation since 2011. He was the chief technical strategist at CMSFX He was also the founder and chief currency strategist at FXTimes Over the years, Fan has not only been a trader and analyst but also an educator. As a proponent of both technical and fundamental analysis in trading, Fan advocates simplicity and discipline as key factors in making trading decisions when faced with so many "clues" and "signals". Currently Fan Yang is the chief currency analyst and webinar instructor at forexminute.com.