Litecoin rises more than 5 percent tracking the relief rally in Bitcoin. However, the cryptocurrency is expected to face renewed bearish momentum near $4.500.
In my previous Litecoin technical analysis, I mentioned that Litecoin is in the strong grip of the bears. I maintain my bearish view on the cryptocurrency and see significant price advances being sold into.
Technically, things look bearish for Litecoin and we should see $3.000 this month.
Litecoin Chart Structure – There hasn’t been a meaningful change in the chart structure, which is that of a lower top, lower bottom.
Fibonacci Retracements – The 23.6% Fibonacci retracement of $4.471 will be a major hurdle to cross.
Moving Average Convergence Divergence – The MACD is sticking close to the Signal Line after a bearish crossover. The Histogram is negative at -0.0706 while the MACD is at 0.0724 and the Signal Line is at 0.1430.
Momentum – The Momentum is flat-to-negative with a value of -0.2933.
Money Flow Index – The current value of the MFI is strong at 63.6829.
Relative Strength Index – The RSI provides no significant information with its value of 50.3860.
Now that all the technical considerations have been laid out, here is what I infer.
Litecoin’s recent consolidation region of $4.500-$4.550 will prove to be a strong resistance for the bulls. Add to it the pressure posed by the 23.6% Fibonacci retracement level of $4.471, and things become extremely tough. So, if market participants are building long positions, consider liquidating them at the mentioned resistance levels, and create fresh short positions for a target of sub-$4.000 by placing a stop-loss above $4.500.
Market participants are also advised to stay abreast with the latest movements in the Bitcoin market, which is leading the price action in Litecoin. And, Bitcoin looks weak!