Litecoin has fallen to $2.677 after a fresh collapse from the short-term support line. The technical indicators are suggesting oversold conditions, but I believe that the cryptocurrency can still lose value in the coming sessions.
There is also a slim chance that Litecoin may briefly enter into a very tight range.
Take a look at what the technical indicators are saying about Litecoin.
Litecoin Chart Structure – After the tiring sideways consolidation which extended for 9 straight sessions, Litecoin broke down from the short-term support and is seen heading towards the monthly low of $2.500. I am not expecting the selling to abate quickly following this fresh breach.
Moving Averages –The 9-day SMA has for long been acting as the limiting factor for Litecoin. I am expecting Litecoin to remain briefly between the 9-day SMA of $2.7755 and the 200-day SMA of $2.5311.
Moving Average Convergence Divergence – As MACD and Signal Line remain in close contact, the Histogram is negligibly positive at 0.0018. The MACD and Signal Line, however, are deep in the red with respective values of -0.3222 and -0.3241.
Momentum – One positively surprising aspect is the rise in Momentum value even when sellers clearly have the upper hand. The Momentum reading has jumped to -0.2435.
Money Flow Index – The MFI is indicating grossly oversold levels with its value of 15.1929.
Relative Strength Index – The RSI is also telling of near-oversold conditions with a reading of 30.7693.
The chart structure and the technical indications point to more bearishness for the cryptocurrency, however, a bounce-back or a brief consolidation between the above-mentioned moving averages cannot be ruled out.
Remain short on Litecoin and exit if the market provides you with a rebound. Do not attempt to catch this falling knife until $2.000 is reached.