LTCUSD recently consolidated in a descending triangle pattern and has broken below support. This signals that bears are regaining control of price action and could reverse a lot of the previous gains.
However, the 100 SMA is still above the longer-term 200 SMA so the path of least resistance might still be to the upside. Price has fallen below both dynamic inflection points, though, to signal that selling pressure is picking up. The chart pattern spans 75 to 90 so the resulting selloff could last by 15, taking price down to 60 next.
This is in line with a former resistance area that could hold as support. If so, LTCUSD might pull back up to the broken triangle support or go for a move up to the latest highs around 90.00.
Stochastic is pointing down but is close to oversold levels to indicate exhaustion among sellers. RSI is also near oversold levels to hint that buying pressure might return soon.
Dollar demand has remained supported due to the pickup in risk aversion after North Korea tested another missile launch. South Korea is also conducting tests of its own, leading many to worry about geopolitical risks and the prospect of an all-out war between the nations.
Keep in mind, though, that the latest NFP report turned out weaker than expected so FOMC hike expectations are weaker. This could also dampen hopes of a December tightening move or the start of the balance sheet unwinding starting this year. Commentary from Fed officials and to some extent government officials could continue to influence dollar movement from here.
For now, the attention is mostly on geopolitical risk and safe-haven demand. Litecoin has recently reached an all-time high and the recent drop is being blamed mostly on profit-taking. If that’s the case, bulls could be waiting around areas of interest, ready to revive their long positions and allow the rallies to resume.