Litecoin has been consolidating since hitting the low on the year just under 1.10. It rebounded sharply to about 2.40 around mid-January, and has since drifted back below 2.00. This week, price has been climbing and is now back at the 2.00 handle, which provided resistance twice in February as we can see in the 4H chart.
The 4H chart shows that there was a range between roughly 1.80 and 1.90. Litecoin started the week breaking out of this range. After a few tentative candles in the 4H chart, price respected the broken range as support, and has rallied to 2.00, where we are indeed seeing some rejection, though the market continues to push at this resistance.
Now, if price break above 2.00 and stays above, the next resistance will be around 2.35-2.50. Here, price will meet a resistance pivot from late January as well as the 100-day SMA. There will also be upside risk towards the 2.80 high on the year as seen in the daily chart. A swing projection will target the 3.00 handle. We should probably limit our bullish outlook to 2.80-3.00 seeing that the prevailing mode has been bearish throughout 2014.
If there is a pullback, we should again see support in the 1.90-2.00 area if the bullish swing is to materialize. A fall below the 1.85 area however would signal a false break to the upside, and put the pressure back towards first the 1.80 support, with the 1.10 low in sight below 1.80.
Note that the RSI in the daily chart is at 60. Failure to push above would reflect maintenance of the prevailing bearish momentum. If we look at the previous article on bitcoin, we can see that BTCUSD has been more advanced in its bullish correction. Perhaps, that is a sign that litecoin will be able to liberate itself from the bearish momentum, and push towards the 2.80 high on the year.
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