Litecoin (LTCUSD: Bitfinex) has been consolidating since breaking above the 2.00 handle. The 4H chart shows a slightly descending triangle, but essentially price is in a range consolidation. As we start the 3/18 session, the market is once again testing the consolidation lows around 1.98. Note that this was a previous resistance area as well, and price is testing the 100-period SMA in the 4H chart.
What we also see in the 4H chart is that the 4H RSI is tagging 40. A clear break below it would reflect loss of the bearish momentum. But as we saw back on 2/23, this can sometimes be a false signal, as the market continued higher even after the RSI dipped below 40. Still it would be a good additional confirmation if other signs are bearish as well.
However, the decline will meet a rising trendline from February it litecoin approaches the 1.92 area. Really, there could be buyers at 1.90 to 1.92, which represents a support/resistance pivot area.
A break below 1.90 would be a bearish signal that first exposes the 1.78-1.80 lows from a previous consolidation. Below that the February low at 1.67 would be in sight, with risk of extending down to the 2015-low at 1.10.
Let’s say price reaches the 1.92-1.93 area, and there is a bounce off of the aforementioned rising trendline. Let’s see if it can clear back above 2.00, which would maintain the prevailing uptrend, with the 2.45 January high, and then the 2015-high around 2.77.
In the 1H chart, we can see that if price hits the rising trendline while the RSI is below 30, preferably with a bullish divergence, litecoin should find support.
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