Key Highlights
- Litecoin price showed a few major bearish sign, which are pointing towards more losses in the short term.
- Looking at the 4-hours chart with data feed from HitBTC, the price is about to settle below a monster contracting triangle pattern.
- The 30-min chart (data feed via Bitfinex) has a bearish trend line, which may be seen as a sell area moving ahead.
Litecoin price struggle to trade higher continues, and it looks like it may head lower as the 4-hours chart is signaling a critical break.
Can We Sell?
Litecoin price recently tested the $3.00 support area where it found buyers and corrected higher. However, it is facing a lot of hurdles on the way up. Looking at the 30-mins chart (data feed via Bitfinex), there is a bearish trend line formed, which acted as a barrier for gains earlier and may continue to stall the upside move. Another point to note is that the 100 simple moving average on the 30-min chart (data feed via Bitfinex) is also positioned just below the highlighted trend line and resistance area.
Furthermore, the 61.8% Fib retracement level of the last drop from the $3.10 high to $3.00 low is just above the 100 MA, suggesting the importance of the highlighted resistance area near $3.06-10. There is a chance of sellers taking control around the mentioned levels, and it can be considered as a sell zone. Only a break above the highlighted trend line and resistance area may negate the current bearish view, and could take the price towards the 88.6% Fib retracement level of the last drop from the $3.10 high to $3.00 low. On the downside, the most important support area is around the $3.0 handle (looking at the 30-mins chart with data feed via Bitfinex).
When we consider a higher time frame chart, then the 4-hours chart with the data feed from HitBTC points to a lot of bearish pressure. There is a crucial contracting triangle pattern formed, which sellers are attempting to break. There is already a minor reaction below the triangle support trend line. We need to see whether the price settles below it or not. A successful 4-hour close below the triangle support trend line might be very dangerous for buyers and could ignite a sharp downside move.
On the other hand, if the recent reaction below the triangle support trend line turns out to be a false move, then the price might correct higher. An initial resistance could be around the 23.6% Fib retracement level of the last drop from the $3.40 high to $3.072 low. However, there is a major resistance formed near the 100 simple moving average (4-hours chart with data feed from HitBTC) is aligned with the 38.2% Fib retracement level of the last drop from the $3.40 high to $3.072 low.
Looking at the indicators:
4-hours MACD – The MACD is about to change the slope to the bearish zone, which is a negative sign.
4-hours RSI – The RSI is below the 50 level, pointing no sign of the bulls in the near term.
Intraday Support Level (HitBTC) – $$3.00
Intraday Resistance Level (HitBTC) – $3.15
Charts from Bitfinex and HitBTC; hosted by Trading View
