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Owing to short covering and some value buying, Litecoin has managed to reach the stop-loss level of $1.690 mentioned in All the Reasons to Short!. So, will we see an upside breakout or will the bears make a timely entry, let’s find out here.
Litecoin is trading up 3.37% at $1.688.
Image: https://www.tradingview.com/x/2jDBtvfi/
A technical analysis of the 240-minute LTC/USD price chart has been conducted to help the market participants make informed trading decisions.
Litecoin Chart Structure – Litecoin has rebounded strongly after crashing to a low of $1.562. Interestingly, the cryptocurrency has formed a Reverse Head & Shoulder pattern – a reversal pattern, completion of which results in a price advance of the underlying security – and is on the verge of breaking out. The pattern’s neckline coincides with the previously stated pressure point of $1.690. If bears get nervous now, bulls will take away the game from them.
Fibonacci Retracements – The cryptocurrency is currently trying to sustain above the 61.8% Fibonacci retracement level of $1.668. Having failed twice earlier at doing the same task, Litecoin will witness a swift jump if $1.690 is crossed.
Moving Average Convergence Divergence – On another positive note, the MACD indicator has had a positive crossover with the Signal Line; the MACD reading is now -0.0333 while the Signal Line value is -0.0471. The Histogram has leapt to the positive territory and is now at 0.0138.
Momentum – The recent rally is also accompanied by a surge in momentum; the Momentum indicator has edged above the 0 level and is minutely positive at 0.0373.
Relative Strength Index – Bears are losing their grip on this game. The underlying strength indicator RSI is now at 47.7501.
Conclusion
This rally is not a trap! However, bulls will need to exert more pressure if they are to successfully overcome the strong selling pressure they are witnessing now. A successful breakout will set the price target at $1.800.
