- Litecoin price moved a few points higher Intraday and it looks like it is forming a breakout pattern.
- There is likely an inverse head and shoulders pattern forming on the 30-min chart (data feed via Bitfinex), which if shapes well may take the price higher.
- The price yesterday managed to break a descending channel pattern formed on the 2-hours chart to clear the way for more gains.
Litecoin price if stays positive may trade higher. There is an inverse head and shoulders pattern in making that can ignite an upside rally.
Buy with a break?
Litecoin price is showing a few positive signs on the lower as well as on the higher time frame charts. The price yesterday attempted on a couple of occasions to clear a bearish trend line formed on the 30-min chart (data feed via Bitfinex), and buyers finally succeeded in taking the price higher. The price cleared yesterday’s bearish trend line, but there is now another resistance trend line formed on the same chart. The highlighted trend line may act as a pivot area for the price in the near term.
The most important point is that the price is likely forming an inverse head and shoulders pattern on the 30-min chart (data feed via Bitfinex). The neckline can be considered as the highlighted bearish trend line. If the price climbs higher, then a break above the neckline resistance area could take it towards $3.15. However, there are a couple of minor hurdles on the way up for the price starting with the 100 hourly simple moving average (data feed via Bitfinex). Moreover, the 38.2% Fib retracement level of the last drop from the $3.13 high to $3.00 low is positioned around the highlighted neckline resistance area to act as a perfect pivot area. A break above the neckline may suggest that the inverse head and shoulders pattern is valid. In that situation, the price may well head towards the 76.4% Fib retracement level of the last drop from the $3.13 high to $3.00 low.
Looking at the higher time frame chart, there was a descending channel pattern formed on the 2-hours chart with the data feed from HitBTC (as highlighted in this week’s analysis). Buyers managed to clear the channel resistance and took the price higher. Currently, the price is struggling near a major barrier in the form of the 100 simple moving average (H2, data feed via HitBTC), which is also aligned with the 50% Fib retracement level of the last drop from the $3.28 high to $3.05 low. A break the 100 MA and resistance area may call for more gains in the short term.
The next resistance on the upside could be around the 76.4% Fib retracement level of the last drop from the $3.28 high to $3.05 low where sellers might take a stand.
Looking at the indicators:
30-min MACD – The MACD is in the bearish zone, but may change the slope if buyers step in.
30-min RSI – The RSI is below the 50 level, which is a concern if buyers have to take the price higher.
Intraday Support Level (HitBTC) – $3.08
Intraday Resistance Level (HitBTC) – $3.18
Charts from Bitfinex and HitBTC; hosted by Trading View