Litecoin has been unable to break free from the narrow trading range that it entered into following the abysmal collapse to $1.60 during last week. The price is also only mildly corrected from yesterday’s $1.80 to $1.79 today. With this, Litecoin has yet again proved the significance of the marked Resistance Line 1.
Application of technical indicators on the 240-minute LTC/USD price chart above revealed some interesting information.
Moving Average Convergence Divergence – The MACD indicator and the Signal Line are relentlessly pursuing the common goal of reaching the positive territory. The latest MACD value is marginally negative at -0.0088 and the Signal Line value is at -0.0157. The Histogram value also stands comfortably at 0.0069.
Momentum – The Momentum indicator has taken a breather in concurrence with the consolidating Litecoin value. The Momentum value is currently at 0.0277, which is extremely close to the 0 level. A declining momentum can lead to a breakdown in the cryptocurrency, which can resume its downtrend.
Relative Strength Index – The latest RSI value of 47.4753 should also be watched closely. A fall in the underlying strength reading cannot bode well for Litecoin.
Chart Structure – As can be seen from the chart above, the price has failed to cross $1.80 and sustain confidently. The resistance has been marked by the horizontal red line while the support has been named Support Trendline. The present value of $1.79 also coincides with the Resistance Line 1 as mentioned in the previous analysis, Minor Gains. A breakout from the narrowing trading region should lead to a big move in the price.
It cannot be said for sure when the breakout will happen, but looking at the contracting pattern, a big move in either direction is due in the next 48-72 hours. With technical indicators hinting towards a bearish bias, I expect the previous week’s low of $1.60 to be retested.