Litecoin opened up a bearish outlook toward the 2014-low of 2.21 when it broke below a support pivot at 6.66. Since then, price has been “chewing” down the tail from the July 1st spike down. The trend looks bearish in the daily, 4H ,1H, down to the 15-minute chart, based on the moving averages, and the RSIs in the these time-frames.
In the 4H chart, you can see that price has fallen sharply over the past 2 sessions, but there has been no signs of stopping except for a bit of bullish divergence between price and the RSI. However, volume during the dips has been strong, so we can not rely solely on the bullish divergence to consider a consolidation or pullback.
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When we move down to the 15-min chart, we can see that price has been consolidating, and drifting down during the 8/13 session. It has formed a falling wedge. around the 5.00 handle.
If litecoin price can rally above 5.00 it would break above the falling wedge, as well as the 50-period SMA in the 15-min chart. If then, price can start treating the 4.90-5.0 area as support, we can start considering a bullish correction or consolidation in the short-term.
The 15-min RSI reading should also break above 60 and preferably tag 70 to show bullish momentum in the near-term. If the 15-min RSI then comes back but holds above 40, we can say that bullish momentum is building in the near-term, which again should introduce the bullish correction/consolidation scenario for the short-term.
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If we do get a pullback, we should monitor that 6.66 level as resistance. If price stays below 7.0, the bearish outlook is still valid for the short to medium term, with downside risk toward 2.21.
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