Litecoin Seeking a Short-term Price Bottom

0
133
Litecoin Seeking a Short-term Price Bottom

Since breaking below a support pivot at 6.66, litecoin has been falling sharply the last couple of sessions. The bearish swing seems have started to stall when price dipped below 5.0. During the 8/14 session, price failed to break below the previous session low at 4.66, suggesting there could be a short-term consolidation, which is also suggested by the bullish divergence in the 1H chart. 8/14 price action followed the bullish divergence a rally attempt which was held below 5.35.

The 1H chart shows litecoin price seeking a bottom. So far, the 8/14 session established a higher low, but a break above 5.35 during the 8/15 will be needed to establish a higher high. If the 1H RSI breaks above 60, it would also reflect loss of bearish momentum in this time-frame.

Litecoin 1H Chart 8/15
litecoin 8/14 1h chart

(click to enlarge)

When you look at the 15-minute litecoin chart, you can see that during this short-term consolidation, the 200-, 100-, and 50-period SMAs have clustered together. The bullish push at the beginning of the 8/15 session has brought price above this cluster, showing a bullish initiative in this time-frame. We can also see the RSI approaching 70.

If the 15-min RSI can break above 70, and price can break above 5.35, we should then look for further confirmation for the short-term bullish outlook. For example, if price dips back but holds above 5.00, while the 15-min RSI dips to 40 but holds above, we should look for another bullish attempt that has upside back to the 6.66 pivot, which was previously support.

Litecoin 15-min chart
litecoin 1h chart 8/14

(click to enlarge)

If litcoin breaks back below 5.0, it will clear back below the cluster of SMAs, which would then shelved the bullish outlook, and revive the bearish outlook, which has strengthened since the break below 6.66.

To contact the reporter of this story, email Fan Yang at fan@forexminute.com
Previous Post: Technical Forecasts for EUR/USD, GBP/USD, and USD/JPY