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.
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.
(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.
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