Last week, Litecoin rallied and broke above 2.00 but stalled near 2.15 mid-week. The 1H chart shows litecoin retreating in a falling wedge throughout the rest of the week and weekend. Another way to describe this correction is an ABC correction, where A is similar in length to C.
We did see the 1H RSI break 40, which shows loss of the prevailing bullish momentum. Price did fall below the 100-, and 50-hour SMAs, which took away some bullish bias. However, the fact that price held above the 200-hour SMA, and was able to climb back above 2.00 shows that bulls are hanging on in the short-term.
As we start the new week in the Asian session, we are seeing price break back above the 100-, and 50-hour SMA as well as crack the falling wedge pattern. With the prevailing uptrend still in play, the breakout opens up a bullish continuation outlook with pressure towards 2.15 and with risk of breaking higher. Let’s take a look at the 4H chart to see price action since a month ago.
The 4H litecoin chart is even more convincing of the bullish continuation scenario. It shows market that has been bullish since a mid-February low at about 1.67. Note that price has since held above the 200-, 100-, and 50-period SMAs while the RSI reading has tagged above 70, and has held above 40 for the most part. These are signs of bulls taking over and momentum picking up. As price breaks above the falling wedge consolidation, it is maintaining the prevailing bullish bias, and if price pushes above 2.15, it has the 2.43 high from January in sight, as well as the 2015-high around 2.75.
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