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Following the lead of Bitcoin, Litecoin has gained 5.69% over the weekend. The advance has also brought the price closer to its resistance zone, beyond which Litecoin may witness a massive rally. Litecoin is currently trading at $3.047.
In my previous analysis titled This Market is not for the Greedy!, I had suggested that Litecoin be shorted by keeping a strict stop-loss above $2.980. Those who would have followed this advance would have minimized their losses significantly.
Image: https://www.tradingview.com/x/sUbM43mT/
Technical analysis of the 240-minute LTC-USD price chart points to a probability that the cryptocurrency may, in fact, be forming a new trading range.
Litecoin Chart Structure – A closer look at the chart above suggests that Litecoin is trading in a wide range of $2.690-3.090. Currently near the resistance, Litecoin may face profit booking and creation of bearish positions.
Moving Average Convergence Divergence – As Litecoin spends time near the highs, the Histogram is falling. The Signal Line can be seen fast catching up with MACD as the latter goes flat. The latest values of MACD, Signal Line and Histogram are 0.0416, 0.0373 and 0.0043 respectively.
Momentum – The Momentum indicator is on the verge of hitting the 0 mark. The latest Momentum value is 0.0670.
Relative Strength Index – The RSI value of 58.3771 is indicative of the bullish control over Litecoin.
Conclusion
Litecoin seems to be trading in a price band of $2.690-3.090, and a breakout beyond either of these levels is expected to fuel the action in that direction. But until that happens, market participants can trade this range. Short Litecoin at current levels by maintaining a strict stop-loss above $3.090 for a target of $2.900. If a positive breakout does occur, cover the short positions and initiate light long positions.
Market participants are also advised to keep track of the looming Grexit, which is rumored to be the major contributing factor in the price rise of Litecoin.
