It only gets better for the short sellers! In my yesterday’s analysis, Fall from Grace, I had mentioned that the decline may worsen to $1.590, and Litecoin has touched $1.562 since the previous observation. The cryptocurrency has now dropped to a crucial level, below which I expect a rapid decline in the market cap.
Litecoin is currently trading down 2.2% at $1.633.
Things look extremely worrisome for the Litecoin bulls on the 240-minute LTC/USD price chart, conveying that market participants should consider it only as a sell on rise candidate.
Litecoin Chart Structure – Litecoin’s drop briefly pushed it below the trendline drawn from the previous two peaks (the horizontal blue line in the chart above) but closed above it. The near-term support level is now $1.594 while the level of $1.690 will prove to be a pressure point.
Fibonacci Retracement – Crucial Fibonacci support levels continue to get challenged and breached. After breaking the 61.8% Fibonacci retracement level, bulls tried to recoup the losses but instead, they failed miserably in even holding their ground. As a result, Litecoin fell to the 76.4% retracement level of $1.593.
Moving Average Convergence Divergence – The MACD and the Signal Line are unable to reverse their direction, following a continuous decline in the Litecoin price. The latest MACD and Signal Line values are -0.0524 and -0.0436, respectively.
Momentum – The Momentum indicator has retested the -0.2000 level, and jumped to -0.0521.
Relative Strength Index – The underlying strength indicator conveys that the cryptocurrency is currently out of the oversold region; the latest RSI reading is 31.8078.
I am expecting Litecoin to erase all the gains of this rally and head down to $1.470 this week. However, I will wait for a rise up to $1.670 to go short in this counter. Maintain a strict stop-loss above $1.690. Position your trades keeping the volatility in mind!