- Litecoin price showed a few major bearish sign, which are pointing towards more losses in the short term.
- Looking at the 4-hours chart with data feed from HitBTC, the price is about to settle below a monster contracting triangle pattern.
- The 30-min chart (data feed via Bitfinex) has a bearish trend line, which may be seen as a sell area moving ahead.
Litecoin price struggle to trade higher continues, and it looks like it may head lower as the 4-hours chart is signaling a critical break.
Can We Sell?
Litecoin price recently tested the $3.00 support area where it found buyers and corrected higher. However, it is facing a lot of hurdles on the way up. Looking at the 30-mins chart (data feed via Bitfinex), there is a bearish trend line formed, which acted as a barrier for gains earlier and may continue to stall the upside move. Another point to note is that the 100 simple moving average on the 30-min chart (data feed via Bitfinex) is also positioned just below the highlighted trend line and resistance area.
Furthermore, the 61.8% Fib retracement level of the last drop from the $3.10 high to $3.00 low is just above the 100 MA, suggesting the importance of the highlighted resistance area near $3.06-10. There is a chance of sellers taking control around the mentioned levels, and it can be considered as a sell zone. Only a break above the highlighted trend line and resistance area may negate the current bearish view, and could take the price towards the 88.6% Fib retracement level of the last drop from the $3.10 high to $3.00 low. On the downside, the most important support area is around the $3.0 handle (looking at the 30-mins chart with data feed via Bitfinex).
When we consider a higher time frame chart, then the 4-hours chart with the data feed from HitBTC points to a lot of bearish pressure. There is a crucial contracting triangle pattern formed, which sellers are attempting to break. There is already a minor reaction below the triangle support trend line. We need to see whether the price settles below it or not. A successful 4-hour close below the triangle support trend line might be very dangerous for buyers and could ignite a sharp downside move.
On the other hand, if the recent reaction below the triangle support trend line turns out to be a false move, then the price might correct higher. An initial resistance could be around the 23.6% Fib retracement level of the last drop from the $3.40 high to $3.072 low. However, there is a major resistance formed near the 100 simple moving average (4-hours chart with data feed from HitBTC) is aligned with the 38.2% Fib retracement level of the last drop from the $3.40 high to $3.072 low.
Looking at the indicators:
4-hours MACD – The MACD is about to change the slope to the bearish zone, which is a negative sign.
4-hours RSI – The RSI is below the 50 level, pointing no sign of the bulls in the near term.
Intraday Support Level (HitBTC) – $$3.00
Intraday Resistance Level (HitBTC) – $3.15
Charts from Bitfinex and HitBTC; hosted by Trading View
Disclaimer: The information contained herein is not guaranteed, does not purport to be comprehensive and is strictly for information purposes only. It should not be regarded as investment/trading advice. All the information is believed to come from reliable sources. NewsBTC does not warrant the accuracy, correctness, or completeness of information in its analysis and therefore will not be liable for any loss incurred.