Litecoin has tumbled roughly 5 percent as Bitcoin went weak and has neared the downward sloping support.
In the previous Litecoin price technical analysis titled Breaks Out, Buy Near Support, I mentioned that any pressure on Bitcoin will get reflected in Litecoin as well. It was also stated that the support of $3.820 should prevent immediate losses. As can be seen, the cryptocurrency touched an intraday low of $3.820 before retracing.
Technical analysis of the daily LTC-USD price chart and the action in the Bitcoin market compel me to be only cautiously optimistic on Litecoin.
Litecoin Chart Structure – Now trading at $3.851, Litecoin has come close to the downward sloping support trendline. However, the support level must be revised accordingly to $3.720 now, which also happens to be the recent bottom. Therefore, a close below this level will puncture the positive sentiments in Litecoin.
Moving Average Convergence Divergence – The MACD, Signal Line and Histogram are lingering in the sub-zero region with respective values of -0.0748, -0.0187 and -0.0560.
Momentum – The cryptocurrency has been unable to shrug off negative momentum as the current value comes out to be -0.2971.
Money Flow Index – The MFI is only slightly changed to 31.4597.
Relative Strength Index – The 14-day RSI is now 45.0771, down from its previous value of 48.2476.
The weakness in Bitcoin has come to haunt Litecoin again. Further selloff in the Bitcoin market may lead to breakdown of the support and therefore, I am only cautiously optimistic on Litecoin. Buy near the revised support of $3.720 by placing a stop-loss below the trendline.
I do not see significant near-term downside in Litecoin if Bitcoin is able to hold $260.
Current market conditions do not foretell of a spike in volatility in the coming sessions.