Litecoin did not rally much after establishing a price bottom over the weekend and to start the April 6th session. Instead, it stalled in the 1.72-1.73 area twice. After consolidating between that resistance and support around 1.68, LTCUSD is ending the April 6th session and starting the April 7th session with a bearish breakout.
Price action is also showing resistance at 1.69 and the RSI is starting to break below 40, which shows loss of the prevailing bullish momentum. Also, LTCUSD is now trading under the 200-, 100-, and 50-period SMAs again.
This bearish breakout could be reviving a prevailing downtrend or at least put pressure towards the 1.61 March low. While the 1H chart eyes a bearish attempt within a sideways market, the 4H chart shows that this “sideways” action is actually a consolidation during a downtrend. Thus, the market is neutral-bearish, with emphasis on the bearish component.
The emphasis on the bearish component is not only based on the fact that the prevailing trend is bearish, but also these observations:
1) Price remains below the 200-period SMA, and is now back under the 100-, and 50-period SMAs.
2) The RSI did crack 60, but that was only a brief, intra-session violation, so we can still say that the bearish momentum was maintained throughout the consolidation since last week.
With the 1H and 4H chart pointing south, litecoin is poised to test that 1.60 low. If the cryptocurrency breaks this support, it will have the 2015-low at 1.10 as the next target, and key support. At this point, if price holds above 1.60, it is in consolidation, but only a break above 1.82 should introduce a bullish outlook.
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