LTCUSD Price Technical Analysis – Double Top Pullback

LTCUSD Price Technical Analysis - Double Top Pullback

LTCUSD Price Key Highlights

  • LTCUSD price recently formed a double top pattern and broke below the neckline, confirming that a downtrend is in order.
  • Before the selloff can proceed though, litecoin could pull back to the broken neckline support around 3.500 for a retest then resume its drop.

LTCUSD price is starting a downtrend but additional bearish momentum might be needed to push it to new lows.

Fibonacci Retracement Levels

Applying the Fibonacci retracement tool on the latest swing high and low on the 1-hour time frame shows that the 50% level is closest in line to the broken neckline support. This might hold as resistance moving forward, pushing LTCUSD price down to the latest lows at 3.266.

The 100 SMA is currently above the 200 SMA so the path of least resistance is to the upside, but a downward crossover appears to be brewing. In that case, the potential downtrend could gain more confirmation and more sellers might join in on the action.

The 200 SMA coincides with the 38.2% Fib at 3.461 and the 100 SMA is in line with the 50% Fib at 3.521. A higher pullback could last until the 61.8% Fib at 3.581 but a break above that area could signal that LTCUSD price is resuming its uptrend.

Stochastic is on the move up, which means that buyers are currently in control of the corrective wave. Similarly, RSI just made it out of the oversold area and is indicating a return in bullish momentum. Once these oscillators reach the overbought zones, LTCUSD price might be ready to head south.

The average directional index has been moving above the 50.0 level, which means that trending market conditions are in play. A move below this area could signal a return to ranging action, possibly keeping LTCUSD price bouncing between support at 3.266 and resistance around 3.500.

Charts from Bitfinex, courtesy of TradingView

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Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.