Key Highlights
- Litecoin price looks like forming an interesting triangle pattern on the hourly chart (data feed via Bitfinex), which may ignite a break moving ahead.
- The price is above the 100 hourly simple moving average, which is a positive sign for bulls.
- Looking at the 2-hours chart (data feed from HitBTC), there is a possibility of a dip from the current levels before buyers step in once again.
Litecoin price may continue to trade in a range, but if we look at the lower time frame chart, then there is a chance of a minor break.
Buy with a break?
We sold many times Litecoins this past week, and most of the times it paid well. However, I think we can look for a very short-term buy in Litecoins if a particular condition is satisfied. There is a triangle pattern on the hourly chart (data feed via Bitfinex), which is likely to act as a catalyst for the next move in the near term. The price recently attempted to trade above the triangle resistance trend line, but buyers failed to hold gains as the price moved back lower. However, the price is above the 100 hourly simple moving average (data feed via Bitfinex), which favor buyers.
If there is a break above the triangle resistance trend line, then we may consider buying in the short term. However, just above the triangle upper trend line, the 76.4% Fib retracement level of the last leg from the $3.20 high to $3.07 low is aligned, which may try to prevent the upside move. So, we need to keep a close eye on the stated fib level for gains. If there is a failure to break the mentioned fib level, then the price may slide back down. On the upside, the next level of interest could be around the last swing high of $3.20.
On the downside, the 100 hourly simple moving average (data feed via Bitfinex) may continue to act as a support area. A break below it could take the price towards the 61.8% Fib retracement level of the last leg from the $3.00 low to $3.20 high, which also coincides with the triangle support area. If we look at the higher time frame chart like the 2-hours chart with the data feed from HitBTC, there are a few negative signs.
First, the price is attempting to close below the 100 simple moving average (H2). If sellers succeed in breaking it, then the price may trade down. Second, there is a bearish trend line formed inside a triangle pattern, which is acting as a resistance and preventing gains. It looks like the 50% Fib retracement level of the last drop from the $3.55 high to $3.06 low is also in the mind of buyers.
Only a break above the stated fib level and the trend line may call for a move towards the 61.8% Fib retracement level of the last drop from the $3.55 high to $3.06 low.
Looking at the indicators:
Hourly MACD – The MACD is almost flat, suggesting ranging moves in the short term.
Hourly RSI – The RSI is just above the 50 level, which is a positive sign.
Intraday Support Level (Bitfinex) – $3.08
Intraday Resistance Level (Bitfinex) – $3.16
Charts from Bitfinex and HitBTC; hosted by Trading View
