Litecoin Remains at the Crossroad

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Litecoin Remains at the Crossroad

Litecoin has been in a choppy consolidation mode. After rallying from a low of 3.33 in August, it established resistance at 6.19.
– Price looks bullish relative tot eh 100- and 50-period SMAs in the 4H chart.
– However, price is below the 200-period SMA, which is a bearish sign.
– The RSI has tagged 70 and remains above 70 in the 4H chart, showing that there is still bullish momentum in this time-frame.
– Price held below a falling trendline resistance, and cracked a rising trendline support, showing bearish bias.

As you can see, the 4H chart has mixed signals, and that is because litecoin is at the crossroads.

litecoin 4h chart 8/27

Awaiting Breakout:It looks like litecoin will need to either break above 6.20 or below 4.65 before opening up some directional swing outside of the intra-session time-frame.

A break below 4.65 should open up the 3.33 low, and continue the prevailing bearish trend, with downside risk toward the 2.21 low on the year. A break above 6.25 would clear the resistance and the 200-period SMA,  This should put away the prevailing bearish outlook for the medium-term, and instead reflect a sideways to bullish market in the medium-term. A break above 7.00 might confirm a bullish outlook in the medium-term.

When looking at the 1H chart, we are seeing the loss of some bullish signs.
1) Price is trying to push back below the 200-, 100- and 50-hour SMAs.
2) The 1H RSI broke below 40, and if it tags 30, it shows bearish momentum starting in the 1H chart.
3) We also saw price broke below a couple of rising trendlines.

Litecoin 1H Chart 8/27
litecoin 8/27 1h chart

(click to enlarge)

Now, looking at the 1H chart, a break below 5.20 might be an early sign of bearish continuation because it would clear below the last of the support factors  in this time-frame that would keep ltcusd bullish.

Final Thought: So, in conclusion, while litecoin looks like it is still at the crossroads, I would prefer the bearish outlook based on today’s dip. Note that the 4H and 1H chart shows relatively strong volume with this dip, so I would lean on being ready for the bearish continuation once price breaks below 5.20. Then look for 4.66, then 4.42 and 4.20 as the next support/targets.

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