LTCUSD is still trending lower and moving inside a descending channel on its 1-hour chart. Price is still hovering around the channel resistance, still deciding whether to make a bounce or a break.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is more likely to resume than to reverse. These moving averages are also close to the top of the channel, adding to its strength as a ceiling.
The 61.8% Fibonacci retracement level also coincides with the channel resistance. If this keeps gains in check, LTCUSD could fall back to the swing low around $49.50 or the channel support closer to $48.
Stochastic is on the move down to reflect the presence of selling momentum. However, this oscillator is nearing oversold levels to indicate exhaustion among bears. RSI is also pointing down so LTCUSD could be headed south, and this oscillator has more room to fall.
The US dollar took some hits on Friday due to the downbeat NFP and average hourly earnings data but was still able to recoup its losses before the week closed. The nomination of Powell as next Fed head was also brushed aside by most market participants.
The focus has now turned to bitcoin’s network upgrade and the rumored launch of CME bitcoin futures by the end of the year. This could draw more interest towards this particular cryptocurrency and away from its rivals like litecoin.
Then again, any glitches in the upgrade and hard fork could mean dips for bitcoin and consequently gains for other cryptocurrencies. As for the US dollar, there are no major events lined up this week so the focus could be on the Trump administration’s tax plan.
Any major roadblocks to their proposals could mean dollar weakness, which litecoin might be able to take advantage. A break from the current consolidation could serve as an early signal of where LTCUSD might be headed next.