Last week, litecoin broke above an ascending triangle resistance at 1.50 and surged to almost 1.94 before stalling. Over the weekend ltcusd started to form a slightly bearish channel as we can see in the 1H chart.
As we begin this week, ltcusd found resistance at 1.85. If litecoin is going to consolidate further it is likely going to fall towards 1.70 and the 1H RSI will likely fall below 40. If price holds above 1.80 and the RSI above 40 for the most part during the 5/25 session, then we might not even have further consolidation. In this scenario, the pressure would be back towards the 1.94 high up to the 2.00 psychological level.
A break back below 1.60 might put the bullish outlook on hold. In this scenario, we are likely in a larger and longer consolidation then the channel consolidation we are seeing now.
The thing is, it will likely take more than a break below 1.60 to open up the bearish outlook. Since breaking above triangle which had a range between 1.30-1.50, it will probably take a break below 1.45 to revive the bearish outlook. In the 4H chart, look for the RSI to hold above 40 in t bullish-neutral mode .
Let’s take a look at the bigger picture.
In the daily chart we can see that price action has been sideways so far in 2015, even though ltcusd did manage to drift lower in April to the 0.98-1.00 area. We can say the market is neutral-bearish in the medium-term, but turning bullish in the short-term.
In this mode, there is upside risk towards the 2.44 resistance pivot in January, as well as the 2.76 high on the year. There might even be a clear-out towards 3.00 before the market finds resistance and starts a significant downswing.
Again, if price falls below 1.60, we should keep this bullish outlook on hold. If price falls below 1.50, we should really consider looking back towards the 0.98-1.00 area.
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