Litecoin has advanced following the lead of Bitcoin in the anticipation of a solution to the Greek crisis. While Bitcoin has staged a breakout, Litecoin’s upside potential remains capped by a resistance line. Litecoin is currently trading up 0.97% at $3.019.
I had mentioned in my previous analysis that Litecoin should be shorted if the price rose to $3.020, and I reiterate that short positions should be built by placing a stop-loss (closing basis) above $3.050.
Technical analysis implemented on the 240-minute LTC-USD price chart indicates that the market is awaiting a trigger to make a big move.
Litecoin Chart Structure – In the past 24 hours, Litecoin had hit a low of $2.881 before quickly retracing the steps. Since then, the price action has been extremely tight (check the chart above) implying that Litecoin is preparing for a big move.
Moving Average Convergence Divergence – The MACD indicator offers no comfort to the bears as it stays below the Signal Line. The most recent MACD and Signal Line values are 0.0633 and 0.0759 respectively. The Histogram value remains stuck in the negative territory with a value of -0.0126.
Momentum – The Momentum indicator is barely managing to stay afloat. The latest reading has come in at 0.0800.
Relative Strength Index – Even as the price advanced to resistance zone, the RSI indicator witnessed no strengthening. The 14-4h RSI reading is 58.9407.
Even though Litecoin is sustaining near the highs, it looks weak from a technical perspective. I would suggest that Litecoin be shorted at current levels for a target of $2.600 with a stop-loss just north of $3.050 (closing basis). This skews the risk/reward ratio highly in favor of the short sellers. Expect a big move in the cryptocurrency in the coming session. Keep track of the Greek deal to avert any unnecessary losses.