The Litecoin price has dropped 1.04% against the USD, while tailing the Bitcoin price action which earlier broke below the downside risk level as a part of correction. Litecoin instantly got corrected towards the intraday low near 1.99, and also formed lower lows towards 1.97. The market however picked some upside momentum in last few hours, bringing Litecoin price in a position from where it could retest the channel resistance near 2.02 soon.
The technical indicators on a 4H BTC-e chart are indicating a near-term consolidation scenario. As you can notice, the Litecoin price is just a little above the 50-H SMA (the bold black curve), while the RSI is at 51 — clearly a consolidation area. The MACD blue curve is also aligned with the normal line and saffron signal curve, indicating a bias conflict at this point of time.
We have also drawn an ascending triangle, which is currently keeping a close eye on 2.01 as its next pullback/support level. Litecoin price is poised to stay inside a stiff consolidation range until it successfully rolls above the aforesaid level. If it does so, the initial upside bias towards 2.029 will be validated.
But in case the Litecoin price pulls back from the 2.01, the downside risk will fall towards 2.00 to keep the price falling into a medium-term correction area. In case of a breakout, the bearish momentum will intensify and would simply validate the next resistance near 1.97 — the intraday lower low.
Conclusion
From the look of it, one could simply implement some risk assessment by setting their stop losses near 1.99 — just shy of 2.00 — for a timely exit. In case the consolidation invalidates and price move upside, setting your upside target near 2.01 makes sense.
