- Litecoin price showed a few positive signs of strength day before yesterday, but buyers failed to take advantage of the same as the price moved down.
- A contracting triangle pattern formed on the 30-min chart (data feed from HitBTC) was broken by sellers to ignite another downside move.
- There is now a bearish trend line formed on the hourly chart (data feed from Bitfinex), which may act as a catalyst for a downside move.
Litecoin price failed to trade higher, as the 100 hourly simple moving average stalled gains. More losses are likely as sellers remain in control.
Sell Near Trend Line?
We were looking for a buy opportunity yesterday if buyers manage to clear an important resistance area near $3.10. However, there was no upside reaction, and as soon as the price started trading lower, sellers again managed to take control. There was a contracting triangle formed on the 30-min chart with the data feed from HitBTC, which was breached yesterday. Buyers failed to take the price higher, and as a result, there was a downside move taking the price back below $3.0.
There was a perfect failure noted around the 23.6% Fib retracement level of the last drop from the $3.65 high to $2.99 low. It looks like buyers failed miserably to trade higher, as the 100 simple moving average also played its part well in pushing the price down. The RSI (30-min chart with the data feed from HitBTC) is below the 50 level, and pointing more losses in the short term. To add above all, the MACD is also in the bearish zone, suggesting buyers are struggling to hold the ground. So, looking at the 30-min chart with the data feed from HitBTC it looks like the price may be sold aggressively if it trades back towards the 100 MA.
Looking at the hourly chart with the data feed from Bitfinex, there is a bearish trend line formed, which is providing sellers another reason to take the price down. The 23.6% Fib retracement level of the last drop from the $3.51 high to $2.90 low is aligned with the 100 hourly simple moving average at $3.03. So, it is safe to say that the stated level represents a major resistance for buyers and call for a down move. The next support area on the downside is around the last swing low of $2.90. On the upside, a break above the 100 hourly MA, and the highlighted trend line resistance is needed if buyers have to take the price higher.
A break above the trend line resistance may take the price towards the 38.2% Fib retracement level of the last drop from the $3.51 high to $2.90 low. Any further gains seem to be limited considering the current market sentiment for litecoins. Overall, look for a sell as long as the price is below the 100 MA.
Looking at the indicators:
Hourly MACD – The MACD is in the bearish zone, suggesting more losses ahead.
Hourly RSI – The RSI is below the 50 level, which is a bearish sign.
Intraday Support Level (Bitfinex) – $2.90
Intraday Resistance Level (Bitfinex) – $3.03
Charts from Bitfinex and HitBTC; hosted by Trading View