Key Highlights
- Litecoin price failed to trade higher and broke a short-term triangle pattern on the 30-min chart via the data feed from Bitfinex.
- The price after the break retested broken support area, which acted as a resistance and stalled gains.
- There is another significant breakout pattern in formation if we look at the 2-hours chart with the data feed from HitBTC.
Litecoin price struggle to gain traction continued, and as a result there was a downside reaction taking the price below a short-term support area.
Price to Continue Trading Lower?
Litecoin price yesterday struggled to break a contracting triangle pattern formed on the 30-min chart via the data feed from Bitfinex. Our idea of a short-term buy did not work out, as the price never managed to settle above the contracting triangle. In fact, our idea of selling with a break worked, as the price traded below the support trend line of the triangle and moved towards the $3.44 level. An important point to note is that the price retested the broken triangle trend line where it found sellers for a downside move. It can be seen as a perfect example of a support acting as a resistance once broken.
The price even tested the 61.8% Fib retracement level of the last wave from the $3.51 high to $3.44 low but failed to sustain momentum. It is trading near the 100 simple moving average (30M chart), and attempting to close back above it. Let’s see whether buyers succeed or not. If they fail, then the price may turn down once again and could even break the recent low of $3.44. The next support area on the downside is around the $3.40 level. On the upside, a break above the 100 MA (30M chart) could push the price towards the 76.4% Fib retracement level of the last drop from the $3.51 high to $3.44 low.
If we look at the higher time frame, there is a monster triangle pattern forming on the 2-hours chart with the data feed from HitBTC. The price is currently trading near the triangle support area and struggling to hold it, as it is below the 100 simple moving average (H2 chart). A break below the triangle support area could be very nasty and may open the doors for more losses in the near term.
On the upside, an initial resistance is around the 23.6% Fib retracement level of the last drop from the $3.79 high to $3.46 low, which is positioned with the 100 MA (H2 chart). If there is a move above the 100 MA, then the next level of interest could be around the triangle resistance trend line, coinciding with the 38.2% Fib retracement level of the last drop from the $3.79 high to $3.46 low.
Looking at the indicators:
2-hours MACD – The 2-hours MACD is in the bearish zone, which is a sign that sellers are in control.
2-hours RSI – The RSI is also below the 50 level, signaling the possibility of a downside break in the short term.
Intraday Support Level – $3.44
Intraday Resistance Level – $3.50
Charts from Bitfinex and HitBTC; hosted by Trading View
