- Litecoin’s price surged higher and even managed to break an important resistance area of $3.50-60.
- A perfect break can be easily noticed on the hourly chart (data feed from HitBTC), with support now at $3.60.
- Buying dips may be a good idea in the short term, as the broken resistance area could act as a support moving ahead.
Litecoin’s price traded higher intraday, and our idea yesterday of buying with a break played well. Now we can look to buy dips in the short term.
Litecoin price is currently trading in an uptrend on the 1-hour chart, as there was a critical break that ignited a rally. A contracting consolidation pattern was formed, which was cleared by buyers to take the price higher. From a purely technical perspective, traders can anticipate a lot of buying activity every time the price trades back towards the broken triangle area.
The price action remains bullish above $3.80, and only profit taking may let the price move back to $3.50. Yesterday, we highlighted a range resistance area near $3.50, which was aligned with the 100 hourly simple moving average (data feed from Bitfinex) and the 23.6% Fibonacci retracement level of the last drop from the $4.30 high to the $3.50 low. The price managed to break the same and traded higher.
There is a chance that the price may dip once to attract buyers before heading higher once again. On the upside, the next hurdle lies near the 50% Fibonacci retracement level of the last drop from the $4.30 high to the $3.50 low.
Looking at the Indicators
Hourly MACD – The hourly Moving Average Convergence Divergence is in the bullish zone, signaling more gains in the near term.
Hourly RSI – The Relative Strength Index is around the overbought levels, calling for a minor correction.
Intraday Support Level – $3.60
Intraday Resistance Level – $3.80
Charts from Bitfinex and HitBTC; hosted by Trading View