Litecoin is starting this week bullish rebounding from a failed double top attempt at the end of last week. The 4H chart shows price bouncing off 1.93, which was a common high from a previous consolidation at the beginning of March. Also, note that price held above the 50-period SMA, keeping the bullish bias. Meanwhile, the 4H RSI held above 40, which showed maintenance of the bullish momentum.
However, as we begin the 3/17 (Tuesday) global session, price once again failed to push above 2.05. This third failure introduces the triple top scenario. However, we should not be so fast to turn bearish on this pair even though there is clearly resistance at 2.05.
If price bounces off 1.97 for example, it would be forming an inverted head and shoulders pattern, which in an uptrend is a bullish continuation pattern. Then, if price breaks above 2.05, the bullish outlook would be even stronger because traders will see the breakout of a key resistance in this inverted H&S pattern.
That bullish scenario will open up a resistance around 2.40. Above that the 2015-high around 2.75 will come into play. Let’s take a look at the 1H chart.
The 1H chart shows that price has come back up above the 200-, 100-, and 50-hour simple moving averages. Furthermore, the RSI has tagged 70. This shows some near-term bullish bias and momentum to start the week. Now as price fades, we can see ltcusd threatening the cluster of SMAs. If price can stay above 1.98, it would remain bullish in the near-term. However, a break below 1.96 will shift the bullish continuation scenario into the aforementioned triple top scenario, with pressure on the 1.93 handle and possible lower.
Also, the RSI is about to test 40. If the market is indeed in the bullish continuation scenario, the 1H RSI should hold above 40. Below that, we should think of this week’s initial bullish attempt as a failed one, which adds to the outlook for a price top and bearish correction. For now, because of the prevailing uptrend, we should favor the bullish continuation scenario and expect support in the 1.96-1.98 area.
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