Key Highlights
- Litecoin price settled below the 100 hourly simple moving average via the data feed from Bitfinex, which is a sign of more declines in the short term.
- There is a contracting triangle pattern formed on the hourly chart, which is likely to be tested if the price falls from the current levels.
- Yesterday’s highlighted breakout pattern on the 2-hours chart with the data feed from HitBTC is at risk, as sellers are trying to break it.
Litecoin price remains at a risk of a break down as sellers are attempting to clear a major support area on the 2-hours chart.
Sell Rallies or with a Break?
Our highlighted break for Litecoin price on the 30-min chart via the data feed from Bitfinex was true as the price continued to move down. The price even broke the $3.44 low and formed a new low of $3.42. Now, if we look at the hourly chart via the data feed from Bitfinex, then there is a contracting triangle pattern formed. However, one critical point to note is the fact that the price is now below the 100 hourly simple moving average.
The price already tested the triangle support area on a couple of occasions, but buyers managed to prevent a downside break. There is a chance that sellers may attempt to take the price down once again. So, buyers could be tested another time around the triangle support area. A break below it may be a bearish call for traders and might take the price all the way towards the $3.80 level. Alternatively, if the price manages to correct higher, then an initial resistance can be around the 50% Fib retracement level of the last drop from the $3.51 high to $3.42 low.
However, the most significant hurdle for buyers is near the 100 hourly simple moving average, as it is positioned with the 61.8% Fib retracement level of the last drop from the $3.51 high to $3.42 low. Any further gains may take the price towards the triangle resistance area where sellers may take a stand.
One other important chart that traders must keep an eye on is the 2-hours chart with the data feed from HitBTC. We highlighted a monster triangle pattern, which may play a key role for the next move in the near term. Currently, sellers are attempting to clear it, if they succeed then there is a possibility of sharp declines moving ahead. Looking at the 2-hours chart, there is a resistance formed near $3.55, which represents the 23.6% Fib retracement level of the last drop from the $3.79 high to $3.46 low. The stated level holds a lot of importance as it is coinciding with the 100 simple moving average (2-hours).
Looking at the indicators:
Hourly MACD – The MACD is in the bullish zone, which is contradicting all other bearish signs.
Hourly RSI – The RSI is below the 50 level, which is a sign of more declines moving ahead.
Intraday Support Level – $3.42
Intraday Resistance Level – $3.50
Charts from Bitfinex and HitBTC; hosted by Trading View
