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Litecoin has posted surreal gains following the Greek referendum, soaring from our last observation of $4.100 to hit a new 9-month high of $5.000 before partial profit booking dragged the price down.
Litecoin is currently trading up 16.71% at $4.785 since my last observation, vastly outperforming Bitcoin.
Image: https://www.tradingview.com/x/KLd2e5vM/
It seems that Litecoin has decided to continue to defy gravity even when it is grossly overbought. Technical analysis of the 240-minute LTC-USD price chart confirms that the cryptocurrency does not deserve your dollar at the current level.
Litecoin Chart Structure – The above chart clearly tells that Litecoin had been trading sideways, in a very small range before the blowout. The cryptocurrency registered back-to-back strong upmoves on enormous volumes (check out the chart above). As the price soared to a new 9-month high of $5.000, traders pocketed gains which added pressure on the cryptocurrency.
Moving Average Convergence Divergence – The MACD has crossed above the Signal Line following the strong trading action. The values of MACD, Signal Line and Histogram are 0.2032, 0.1198 and 0.0835 respectively.
Momentum – The Momentum indicator registered a sharp jump in reading post the Greek voting results. The reading has jumped from near-zero levels to 0.7140.
Relative Strength Index – The 14-4h RSI value catapulted to 86.67 when the price raced to $5.000, however, the cryptocurrency is still expensive at the current level. Litecoin has an RSI value of 73.1765.
Conclusion
Long speculators have a strong grip over Litecoin, which is taking the price to atrocious levels without any sound backing. As the valuation gets richer, it is becoming increasingly riskier. Market participants are advised to not buy Litecoin as the risks far outweigh the rewards. The cryptocurrency may face resistance near $5.300, at which traders can take bearish positions while maintaining a tight stop-loss above $5.500. Do not resort to impulse buying.
