Litecoin fell from last week’s high of 5.89 to 4.75, which is the low so far this week. The 1H chart shows a market that is turning bearish at least in this time-frame.
– The 200-, 100-, and 50-hour simple moving averages (SMAs) are in bearish alignment, sloping down, spreading apart, and above price. That reflects a strong bearish trend in the 1H chart.
– The RSI has tagged 30, and has stayed below 60 so far, which reflects maintenance of the bearish momentum.
– Price is below a falling trendline.
– The decline at the end of August was accompanied by relatively strong volume.
As we began this week, litecoin started to consolidate. We can say it is in a double bottom attempt, but it can also simply be consolidation roughly between 4.75 and 5.00. Now if price does break above 5.00, it will clear the falling trendline and the 50-hour SMA, which can signal some consolidation or bullish correction in the short-term, especially if the RSI pops up above 60. However, considering the prevailing swing is bearish, monitor for resistance around 5.10, which is a support/resistance pivot. Now, if price breaks above 5.30, the bearish outlook will be in trouble, especially if the 1H RSI also pushes above 70, which shows bullish momentum in this time-frame. Note a break above 5.30 will clear the 200-hour SMA as well.
Litecoin 1H Chart 9/3
(click to enlarge)
When we look at the 4H chart, we can see that litecoin has been consolidating since finding support at 3.33. The prevailing trend is bearish, but the bearish momentum is lost, and there was some bullish momentum. (the 4H RSI tagged 70). However, price looks ready for a bearish continuation as it tags a support pivot in the 4.70-4.75 area. A break below 4.70 should open up the 3.33 low.
Below 3.33, the 2.21 low on the year would come into play.
If price pushes above 5.30, it would have cleared above the 100-, and 50-period SMAs in the 4H chart. In this scenario, the pressure will be toward the 5.85-6.00 area, which is a previous resistance pivot, and the 200-period SMA in the 4H chart. A break above 6.00 then can introduce a bullish outlook.
Litecoin 4H chart 9/3
(click to enlarge)
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