LTCUSD has formed lower highs and found support at the $51 level, creating a descending triangle pattern on its 1-hour time frame. Price is bouncing off the resistance and may be due for another test of support.

The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside, which suggests that the resistance is likely to hold or that support could be broken. The 200 SMA is also near the top of the triangle, adding to its strength as resistance.

However, the gap between the moving averages is narrowing to reflect weakening downside momentum. If an upward crossover materializes, buying momentum could return and lead to an upside break from the top of the triangle. This chart pattern spans $51 to $57 so the resulting rally or selloff could last by the same height.

Stochastic is heading south to reflect the presence of selling momentum so LTCUSD might follow suit. RSI is on its way up but seems to be hitting a roadblock around the middle of its range, so a return in selling pressure might also be reflected.

Volume and trading activity have been subdued for LTCUSD in the days following confirmation that China will be shutting down bitcoin exchanges in the country. However, the cryptocurrency has managed to lick its wounds as other markets such as Japan, Hong Kong, and South Korea are stepping up.

For now, though investors could stay cautious and wait for further developments. As for the dollar, the FOMC statement turned out bullish for the currency but this seems to have had a limited effect on litecoin. Nonetheless, it’s worth noting that the US central bank will be unwinding its balance sheet starting October and is still open to the idea of an interest rate hike in December.

Further consolidation is eyed until the next major catalyst, but it looks like the path of least resistance in terms of market factors is also to the downside for LTCUSD. One potential factor that could boost cryptocurrencies is the escalation of threats from North Korea as geopolitical risk tends to support demand for digital gold.

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