Key Highlights
- Litecoin price finally recovered intraday, as sellers failed to break and close below a major support area of $3.00.
- A contracting triangle pattern on the 2-hours chart (data feed from HitBTC) was broken in order to ignite an upside rally in Litecoin price.
- The price is currently trading near a crucial area of $3.50, which acted as a support earlier and now stalling gains.
Litecoin price finally showed a few signs of life, as there was a nice upside rally proving that how vital the $3.00 support area is for buyers.
$3.50-60 as Resistance
Earlier this week, we were looking for a buy opportunity, which looks like turned fruitful yesterday. A solid break higher is always a great sign that buyers are stepping in and it’s time for a rally. A similar scenario happened yesterday, as there was a contracting triangle pattern formed on the 2-hours chart with the data feed from HitBTC, which was broken by buyers to open the doors for more gains in the near term. The upside ride was very strong, and looking at the chart, it looks like there might be more upsides left in the short term.
The best part is the fact that the price settled above the 100 simple moving average (2-hours chart with the data feed from HitBTC), and also cleared the 61.8% Fib retracement level of the last drop from the $3.65 high to $2.99 low. The price is currently trading near a monster resistance area at $3.50-55. The stated level acted as a support on many occasions earlier (as shown in the chart), and now acting as a barrier for buyers. The 76.4% Fib retracement level of the last drop from the $3.65 high to $2.99 low is also positioned around the same area. We need to see whether buyers can manage to clear it or not. In such cases there is always a chance of a minor correction before buyers make another attempt to clear a major resistance area.
When we move down to the lower timeframe and analyze the hourly chart with the data feed from Bitfinex, then we can notice that the price broke a bearish trend line for a rally. The break was very critical, as the price settled above the 100 simple moving average (hourly chart with the data feed from Bitfinex). The price stalled near $3.45 area, and it looks like it is forming a corrective structure. If it is true, the price may move down and correct.
On the downside, an initial support can be around the 23.6% Fib retracement level of the last wave up from the $2.97 low to $3.44 high. However, the price may even correct more to test the 50% Fib retracement level of the last wave up from the $2.97 low to $3.44 high where one might consider buying in the short term.
Looking at the indicators:
Hourly MACD – The MACD is about to change the slope to the bearish zone, calling for a minor correction.
Hourly RSI – The RSI is around the overbought conditions, which is another sign or a correction.
Intraday Support Level (Bitfinex) – $3.30
Intraday Resistance Level (Bitfinex) – $3.50
Charts from Bitfinex and HitBTC; hosted by Trading View
