- Litecoin price is showing a few positive signs on the 2-hours chart, but it would be very hard to comment on a possible buy opportunity.
- A flag pattern formed on the 2-hours chart (data feed from HitBTC) was broken by buyers to take the price higher in the short term.
- However, there are a few trend lines on the hourly chart (data feed from Bitfinex), which are acting as a barrier for more gains.
Litecoin price may trade higher in the near term, but it won’t be a wise call to buy Litecoins as the trend still remains down.
$3.00 as a Support?
Litecoin price was under a lot of bearish pressure recently, as it traded down and even spiked below the $3.0 handle. The price started a minor recovery yesterday, and there was a flag pattern formed on the 2-hours chart with the data feed from HitBTC, as highlighted in yesterday’s post. The best part is that the price managed to spike above the highlighted flag pattern, but the upside was limited. There was hardly any bullish momentum after the break, and the price struggled to clear a couple of minor resistances.
The main resistance on the upside was around the 61.8% Fib retracement level of the last drop from the $3.23 high to $3.00 low. This can be seen as a major failure and may call for another downside run. If we look at the other way around, then the price may be moving lower to retest the broken flag pattern where it may finds bids. If that is the case, then the price may trade back higher. The next level of resistance on the upside may be around the 76.4% Fib retracement level of the last drop from the $3.23 high to $3.00 low. A break above the stated fib level could ignite a move towards the last swing high of $3.23. On the downside, if the recent break is a false one, then a test of $3.0 is also possible, which is a short-term support for the price.
Looking at the hourly chart with the data feed from Bitfinex, there was a bullish trend line formed, which sellers managed to break. It can be seen as a major break and could take the price down. The price is currently trading near the 23.6% Fib retracement level of the last drop from the $3.51 high to $2.90 low, and it looks like if sellers remain in control more losses are likely. A retest of the $2.90 is also possible if buyers fail to defend the $3.00 support area.
There is also a bearish trend line that may play a major role, as it is just below the 38.2% Fib retracement level of the last drop from the $3.51 high to $2.90 low, and the 100 hourly simple moving average. Selling can be planned near the 100 MA if the price moves higher.
Looking at the indicators:
Hourly MACD – The MACD is about to change the slope to bearish, suggesting more losses ahead.
Hourly RSI – The RSI is below the 50 level, which is a bearish sign.
Intraday Support Level (Bitfinex) – $3.00
Intraday Resistance Level (Bitfinex) – $3.10
Charts from Bitfinex and HitBTC; hosted by Trading View