LTCUSD recently broke below the bottom of its symmetrical triangle on the 4-hour time frame and has pulled up for a retest. The broken support held as resistance and is allowing the selloff to resume, with the Fib extension tool showing the next downside targets.
Price has made it past the 38.2% and 50% extensions to test the 61.8% level at $215.87. A break below this could lead to a drop to the next support at the 76.4% extension or $202.98 level. The full extension is located at $182.14.
The 100 SMA is below the longer-term 200 SMA to confirm that the path of least resistance is to the downside. In other words, the selloff is more likely to continue than to reverse.
However, stochastic is hovering around oversold levels to signal that sellers are exhausted. If buying pressure returns, LTCUSD could make it back up to the triangle support or even back inside the formation. RSI has room to drop, which suggests that sellers could stay in control for a bit longer.
The dollar has actually weakened across the board but is still faring better than cryptocurrencies. News of South Korea’s plans to ban bitcoin trading appears to have hit the entire industry hard. As it turns out, however, the government wants to remove anonymity in transactions but banks might be unwilling to do so.
Shinhan bank reportedly stated that it does not intend to introduce an identity verification service for deposits and withdrawals from virtual bank accounts. According to its statement:
“We’ve developed a system to introduce identifying virtual account customers in accordance with the government’s efforts to curb the cryptocurrency craze. However, we decided to scrap the service enabling the trade of digital tokens which has become a serious social issue.”
Officials have tried to calm markets after a sharp slide occurred on related updates. As the Office for Government Policy Coordination said:
“The proposed shutdown of exchanges that the justice minister recently mentioned is one of the measures suggested by the justice ministry to curb speculation. A government-wide decision will be made in the future after sufficient consultation and coordination of opinions.”