Litecoin falls 1.47 percent to $3.075 after kissing the resistance at $3.130. In the previous Litecoin price technical analysis, we said that Litecoin could leapfrog to higher levels on consistent support from the buyers, but what we have got instead is a bout of profit booking which once pulled down the price to an intraday low of $3.050.
But can this decline prove fatal to Litecoin? Will the crucial support of $3.000 be breached? Let us try to find that out by conducting a technical analysis on the daily LTC-USD price chart.
Litecoin Chart Structure – As can be seen, the higher top, higher bottom chart structure still holds for Litecoin. The 9-day SMA has been supporting the cryptocurrency for a considerable time now, and therefore, it holds strong significance from a trading perspective. The current 9-day SMA is $3.0624. Another support that is expected to limit any potential or probable loss is at $3.000.
Moving Average Convergence Divergence – The MACD, the Signal Line and the Histogram are all in the positive territory. MACD has a value of 0.0383, Signal Line has a value of 0.0240 and the Histogram has a value of 0.0143.
Momentum – The Momentum value has dropped to 0.0779 following the bearish bias.
Money Flow Index – The MFI has also succumbed to 46.3011.
Relative Strength Index – The latest 14-day RSI value is 55.8178.
Litecoin weakens as traders book profits near the resistance level. Contributing partly to this weakness is the falling Bitcoin price.
With time, the trading range is only getting narrower, and therefore, a breakout will come sooner. However, if bulls continue to give away the advantage, then the probability of a breakdown increases by a huge magnitude.
Keep a tight stop-loss just south of $3.000 for any and all long trades. Create short positions if market pierces this level.