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Litecoin – Range within a Range within a Range

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Litecoin is consolidating roughly between 1.78 and 1.88 as we can see in the 1H chart below.

Litecoin (LTCUSD) 1H Chart 2/26
litecoin 1h chart 2/26
(click to enlarge)

In the 1H chart, the 200-, 100-, and 50-hour SMAs are clustered together and moving sideways, which reflect the low-volatility and sideways price action. However, we do see a slight bearish bias this week as price has held below the cluster of SMAs. Also, the 1H RSI has held below 60 for the most part and has been able to tag 30, which reflects development of bearish momentum.

If price pops up above 1.82-1.83, we would lose this bearish bias, and pressure would be on the 1.88-1.90 resistance area. what happens if price breaks above 1.90?

Litecoin (LTCUSD) 4H Chart 2/26
litecoin 4h chart 2/26
(click to enlarge)

We can see that the range seen in the 1H chart is actually a range within a range, within another price range. Starting with a break above 1.90, if price can respect the smaller range as support, then there is upside to the medium range resistance around 2.05. If price shows support above 1.90 and breaks above 2.05, there is upside risk towards the 2.40-45 area.

Now, if price falls below 1.80 and then respects the broken range as resistance, there will be downside risk to the medium range support around 1.78. A break below wthat exposes the 1.24 low on the year.

We should remember that the prevailing trend since 2014 has been bearish. Thus the downside breakout is favored. Also, if price does reach the 1.24 low, there would be risk of continuing the prevailing downtrend, but the downside risk should be limited to 1.00 because this is where price was at the inception of litecoin, so we should anticipate possible support around the parity level.

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Fan Yang
Fan Yanghttps://www.livebitcoinnews.com/
Fan Yang graduated from the University of Michigan with a Bachelors in Economics. He started his trading in 2006 after joining CMS Forex, a currency broker and became their Chief Currency Analyst. In 2010, he attained his Chartered Market Technician designation. Through the years, Fan has developed trading techniques that can be applied in stocks, currencies, and almost any asset class with liquidity. Although he specializes in technical analysis he uses fundamental factors to help guide his trade ideas before using the technical tools to plan out the trades.

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