Last week, litecoin remained in consolidation between roughly 1.80 and 1.90. In the 1H chart below we can see price action whipping up and under the 200-, 100-, and 50-hour simple moving averages. These SMAs were moving sideways and clustered together. These are signs of a sideways market waiting for direction. To start this week, we are seeing price push above this price range, signaling a bullish outlook in the short-term for the rest of this week.
Litecoin (LTCUSD) 1H Chart 3/2
(click to enlarge)
The first key resistance against the current rally will be in the 2.00-2.05 area, the highs from a couple of week’s ago (in mid-February). However, if price does not hold above 1.90, we will have to see what happens in the 1.83-1.85 area, where the 200-, 100-, and 50-hour SMAs reside. Ability to hold above them can maintain a bullish outlook, but a break below 1.83 could open up the 1.78-80 low, with risk of breaking lower because of a false bullish breakout. In that failed-bullish-attempt scenario, there would be downside risk towards the 2015-low in the 1.10-1.20 area.
Litecoin (LTCUSD) 4H Chart 3/2
(click to enlarge)
The 4H chart shows that price has been coiling throughout February. If the price action here to start the month in March is indicative of direction it will open up not only the 2.00-2.05 area, but also the 2.40-2.45 highs, especially if price starts to hold above the 1.90-2.00 area after breaking above 2.05. However, given the fact that the prevailing trend was bearish in 2014, we should not expect price to extend above 2.45, at least not initially.
Instead, we should expect resistance if price comes up to 2.45, with a bearish outlook at least back to test the 1.90-2.00 area again. A break above 2.45 however, can open up the 3.00 handle if price continues to hold above 2.00.
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