Last week, Litecoin price saw a spike down from around the 1.60 area down to parity (1.00), which is a new low on the year. The 1H chart shows that after the spike price essentially rebounded back to 1.60 but started drifting lower again.
Overall, the price action in litecoin has remained the same – bearish with low volatility.
1) The 200-, 100-, and 50-hour SMAs are sloping down and in bearish alignment, with price trading under all 3.
2) The RSI has held under 60 after tagging 30, reflecting maintenance of the bearish momentum.
When there is a spike down, and price does not climb back up above the highs immediately prior to the spike, price action often continues to “chew” the tail shown by the spike. That means, the current bearish outlook has the 1.00 low in sight.
The 1H chart shows that price is current consolidation between 1.43 and 1.50. The preferred scenario is a break below the 1.43 support, continuing the tail-chewing scenario. A break above 1.50 open up a previous resistance pivot at 1.55, then 1.60 above that. We might have to re-evaluate the bearish “tail chewing” scenario if price clears above 1.60.
In the 4H chart we can see that 1.60 was a previous support pivot, which should act as resistance in a bearish trend. A break above that opens up some common resistance, and previous support/resistance pivot area around 1.72. Above that the 1.82 level will be a key resistance that can keep litecoin’s price action bearish, or bearish – neutral. A break above 1.82 however shifts the mode to neutral, and perhaps neutral-bullish because there would be a potential price bottom.
We should also look for guidance from bitcoin’s price action. Bitcoin is ranging at the moment, but a breakout should provide hints for direction in these cryptocurrencies.
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