This week, litecoin found support at 3.33, and has rallied to 6.18 by the 8/21 session. As we get started with the 8/22 global session, price has retreated from 6.18. However, the 1H chart still shows a bullish market in the near-term.
1) The rising trendline from 8/19 is still holding as support.
2) Price is still above the 200-, 100-, and 50-hour Simple Moving Averages (SMAs).
3) The 1H RSI is still above 40 after tagging above 70 – bullish momentum is maintained.
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It will probably take at least a break below 5.35, and the 1H RSI to be below 40 before we should look back to the bearish outlook. For now, the near-term outlook is bullish, and the short-term mode has shifted from bearish to neutral.
The bullish outlook should be limited because the prevailing trend has been bearish, especially after a break below 6.66, which opened up the 2.21 low on the year. The 4H chart shows that price is consolidating around 6.0, and the 100-period SMA. The RSI has tagged 70, and there is a slight bearish divergence. Litecoin looks ready to dip. Again, a break below 5.35 should open up the bearish outlook in the short-term. However, since we lost the bearish momentum – RSI popped up above 60 and tagged 70 – we should be conservative on the bearish outlook fro now, and limit to to the 3.33 low. the mode should be seen as neutral-bearish.
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Now, if price does come down, but fails to clear below 5.0, and the 4H RSI holds above 40, then we should start thinking about the bullish outlook in the short-term. First the bullish outlook would be the 6.66 resistance pivot to the 7.00 psychological handle. A break above 7.0 will be needed to introduce a bullish outlook in the medium-term.
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