LTCUSD recently broke above its descending trend line to show that a reversal is underway. The 100 SMA has also crossed above the longer-term 200 SMA to show that bullish momentum is returning.
At the same time, the 50% Fibonacci retracement level lines up with the dynamic support at these moving averages. This adds to its strength as support, especially since it lines up with an area of interest around the $175 level.
However, RSI is still on the move down to show that there’s some selling pressure left. This means that a larger pullback to the 61.8% Fibonacci retracement level or even the broken trend line resistance is still possible.
Stochastic is already dipping into oversold territory and looks ready to turn higher to indicate that bullish momentum could pick up. In that case, price could resume its rally to the swing high near $250 and complete an inverse head and shoulders pattern that could lead to a longer-term climb.
Dollar demand ticked lower recently but cryptocurrencies were left behind on the risk rallies. Regulation concerns are back as the SEC charged former cryptocurrency exchange BitFunder and its founder Jon E. Montroll with fraud for allegedly running the operation as an “unregistered securities exchange” and defrauding users of that exchange.
This erased part of the positive sentiment that followed from the US Senate hearing that encouraged regulators to leave the door open for industry developments. Traders might hold out to see how financial regulators proceed and if other nations step up their regulatory efforts as well. In this case, losses could resume as many rush to liquidate positions on these market jitters.
At the same time, the US dollar appears to be supported after the release of the FOMC minutes which showed the policymakers are mostly in agreement to maintain the tightening bias.