LTCUSD recently broke above its descending trend line to indicate that a reversal is underway. Price is currently consolidating, though, but this appears to be a bullish flag continuation signal after the previous strong climb.
The 100 SMA is crossing above the longer-term 200 SMA to signal a pickup in buying momentum. Stochastic is also pointing up to show that buyers are in control of LTCUSD price action.
RSI, on the other hand, is on the move down to indicate that bearish pressure is still lingering. However, the oscillator could simply be moving sideways to reflect further consolidation. A move past the $240 level could be enough to confirm a bullish breakout and a potential climb of the same height as the flag mast.
Dollar demand recovered somewhat in the absence of US traders, which explains the current LTCUSD consolidation. Cryptocurrencies remain supported after the US Senate hearing encouraging developments in the cryptocurrency industry and the positive remarks from South Korean officials soon after.
There are no major reports lined up from the US economy today, so it’s likely that market sentiment could remain the bigger mover of price action. The FOMC will release the minutes of their latest monetary policy meeting on Wednesday, which could bring the attention back to US fundamentals and tightening prospects.
Global tightening forecasts appear to have weighed on risk-taking previously, so hawkish remarks from the Fed could force LTCUSD to give up some ground. Recall that cryptocurrencies have been moving in tandem with stocks and commodities, which suggests that it’s also taking in risk-on flows.
Also, note that BOE Governor Carney had a few negative remarks to say on bitcoin being a failed store of value – something that could impact confidence in the industry. Then again, another round of positive comments on litecoin and its peers could be the catalyst for an upside break, as well as a strong surge in risk appetite.