- Litecoin price continued to trade below a major pivot area of $3.20-30 (price feed from Bitfinex) and failed to move higher.
- A descending channel is now formed after the price failed to break the stated resistance area.
- It is trading near a crucial juncture, as a break below the channel support may call for another round of selling.
Litecoin price is having a tough time and may continue to trade lower as seller’s steps in to prevent gains every time buyers take it higher.
100 MA as Catalyst
There was a decent upside ride in Litecoin price this past week, as it found support near $3.00 for a move higher. However, it looks like $3.20-30 is acting a monster barrier for buyers, as they failed on a couple of occasions to break it. There is now a descending channel formed on the hourly chart (price feed from Bitfinex) that may produce a break in the near term.
A critical point to note is that the channel upper trend line is aligned with the 100 hourly simple moving average (MA), suggesting that it holds the key. As long as the price is below the 100 MA, it may head lower moving ahead. On the downside, the channel support area is coinciding with the 50% Fib retracement level of the last wave from the $3.04 Low to $3.18 High.
A break below the highlighted channel support area could take the price back towards the previous low of $3.04. The price feed provided by HitBTC also suggests that the price has many hurdles on the way up.
Looking at the indicators:
MACD – The hourly MACD moved towards the bearish slope, suggesting sellers in action.
RSI – The hourly RSI is also below the 50 level, adding to the short-term bearish view.
Intraday Support Level – $3.10
Intraday Resistance Level – $3.30
Overall, as long as the price is below $3.20-30 it remains at a risk of more declines.
Charts from Bitfinex and HitBTC; hosted by Trading View