LTCUSD recently made a strong upside break from a long-term consolidation pattern, signaling that an uptrend is underway. However, price hit resistance near 3.600 and might need to make a correction before resuming its climb. Applying the Fibonacci retracement tool on the latest swing high and low shows that price has yet to test the 38.2% Fib. If this holds as support, a quick bounce to the previous highs and beyond could ensue. On the other hand, a larger pullback might last until the lower Fibs and area of interest.
The 50% level in particular lines up with the 3.300 major psychological mark, which previously held as resistance. This could hold as support moving forward. If not, a break below the 61.8% level could set off a drop until the longer-term support at 3.000.
Stochastic is still heading down from the overbought levels so sellers are strongly in control of LTCUSD price action. Similarly RSI is heading south so litecoin price could follow suit. The oscillators are still a long way from reaching the oversold areas so this selloff could last a long while.
Still, LTCUSD has been trailing bitcoin when it comes to price breaks and rallies lately, as risk appetite has supported demand for higher-yielding assets like cryptocurrencies versus the US dollar. Stronger than expected US data and profit-taking before the weekend may have spurred the quick dollar bounce last Friday.
The 100 SMA is crossing above the 200 SMA on the 4-hour time frame, indicating that the uptrend is just gaining traction. More buyers could jump in and push LTCUSD higher once the upward crossover materializes and the 100 SMA increases its distance from the 200 SMA.
To contact the reporter of the story: Samuel Rae at samuel@forexminute.com
