LTCUSD is bouncing off its descending channel resistance and looks ready to resume the drop to support. However, technical indicators are suggesting that the selloff is overdone.
The 100 SMA just crossed above the longer-term 200 SMA to signal that the path of least resistance is to the upside. In other words, resistance is more likely to break than to hold. In addition, these moving averages are holding as dynamic inflection points.
Stochastic is heading south but dipping into oversold territory to signal that buyers are ready to return. RSI also has some room to move lower but is nearing oversold levels and might draw buyers back in.
A dip could still find support at the mid-channel area of interest around 140.00. If so, price could form an inverse head and shoulders formation that would be a classic reversal signal.
Risk aversion returned to the financial markets during the New York session when US President Trump signed a memorandum on imposing higher tariffs on about $60 billion worth of Chinese goods from companies that may be involved with intellectual property theft. A list of companies involved has yet to be drafted and a consultation period will follow.
However, China didn’t take this sitting down as officials have warned that the country won’t back down from a trade war if provoked. This could mean significant repercussions on global trade, weighing heavily on investor sentiment.
Apart from that, news that Japan’s FSA is looking into shutting down Binance operations in the country for failing to secure the appropriate licenses is also bringing regulatory jitters back in the spotlight. Keep in mind that headlines like these typically weigh on altcoin prices as investors rush to liquidate their holdings.
Looking ahead, more updates on the trade war issue and on cryptocurrency regulation could impact litecoin movements in the days ahead.