- Litecoin price looks like completed a short-term correction after a major rally, and it may now trade back higher.
- There was a critical bearish trend line formed on the hourly chart (data feed via Bitfinex), which was cleared by buyers recently to open the doors for more gains.
- The price also managed to close above the 100 simple moving average on the 2-hours chart (data feed from HitBTC), suggesting buyers are stepping in.
Litecoin price may move back higher in the short term, as there are many positive signs emerging on both the hourly as well as 2-hours chart.
Move towards $3.40?
We were looking for a correction in Litecoin price this past week after it managed to surge closer to the $3.50-55 resistance area. The price corrected as low as $3.01, and then it found buyers for another leg higher. There was a bearish trend line formed on the hourly chart (data feed via Bitfinex), which was cleared recently. The stated trend line break looks critical, as it was formed via connecting all previous swing highs. Currently, the price is trading near the 100 hourly simple moving average, which is acting as a minor resistance for the price and stalling more gains.
The main point to note here is the fact the price closed above the 23.6%% Fib retracement level of the last wave down from the $3.44 high to $3.01 low. If there is an hourly close above the 100 simple moving average, then there is a chance that the price may head towards the 50% Fib retracement level of the last wave down from the $3.44 high to $3.01 low. However, if buyers remain in control, the price may even head to test the $3.35 levels, which is coinciding with the 76.4% Fib retracement level of the last wave down from the $3.44 high to $3.01 low. Overall, the hourly chart suggests that the price may move higher in the short term.
If we look at the higher timeframe chart like the 2-hours chart with the data feed from HitBTC, then we can note that the price found buyers near the $3.00-05 area for another leg higher. The best and the most important part is the fact that the price closed the week above the 100 simple moving average (2-hours chart with data feed from HitBTC). So, it looks like sellers were outpaced by buyers and there is a possibility that gains may continue during the start of the upcoming week. The price also broke the 23.6% Fib retracement level of the last drop from the $3.55 high to $3.06 low.
If there is an increase in momentum, then the price may even clear the 38.2% Fib retracement level of the last drop from the $3.55 high to $3.06 low. On the upside, the most critical resistance can be seen near a bearish trend line on the 2-hours chart that may act stall gains moving ahead.
Looking at the indicators:
Hourly MACD – The MACD is in bullish zone, suggesting more gains.
Hourly RSI – The RSI is above the 50 level, which is another positive sign for buyers.
Intraday Support Level (Bitfinex) – $3.05
Intraday Resistance Level (Bitfinex) – $3.25
Charts from Bitfinex and HitBTC; hosted by Trading View