Pausing after a Breakout:
After a surge to 1.94 last week (breaking out from a narrow 1.30-1.50 range), litecoin has been consolidating. The 1h chart shows that the structure of this consolidation has become a descending triangle with support in the 1.75-1.77 area.
Slight Bearish Bias: The resistance pivots are falling, with the latest one around 1.83. A descending triangle inherently carries a slight bearish bias. The main reason for the bias is that support continues to be steadfast while resistance continues to fall. However, a break below 1.75 would likely have a more significant impact than a break above 1.84. This is because after multiple failures to break below the 1.75-1.77, there is likely a buildup of stops just below this support area. So a break below 1.75 will likely open up a sharp dip towards the 1.50 handle, which is a previous resistance.
Now, a hold above 1.50 would still maintain the bullish bias in litecoin since that was the resistance of a previous consolidation range. A break below 1.45 however will likely shift litecoin back to the bearish mode.
Bullish Implications: Now, a break above 1.84 might not open up a sharp rally, but it would open up the 1.94 high. Also it would signal continuation of the prevailing bullish swing so the 1.94 resistance would become vulnerable with upside risk towards the 2.00 handle, then towards a key resistance around 2.44.
Trend Shifting: In the daily litecoin chart, we can see that the cryptocurrency has been trading sideways throughout the year albeit a slight drift lower to the 1.00 handle in April. Now, as price pushes above the 100-, and 50-day SMA and as the daily RSI pushes above 80, we are seeing a shift that might turn litecoin bullish.
Above the 2.44 pivot, we would have a price bottom. The first target above that would be the 2.73 high on the year up to the 3.00 psychological level.
Previous Post by Author: EUR/AUD Testing a S/T Resistance