Litecoin has maintained inside a parallel channel at a time the place the broader market lacked clear path. Nevertheless, one other assault on the decrease trendline uncovered LTC to a minor sell-off. This was backed by the Superior Oscillator and MACD which instantly performed in favor of the bears.
Alternatively, bulls may look to reply on the 200-SMA (inexperienced) to forestall sellers from taking up. On the time of writing, LTC traded at $170.8, down by a marginal 0.4% during the last 24 hours.
Litecoin 4-hour Chart
Supply: LTC/USD, TradingView
The final week has seen LTC oscillate inside a parallel channel of $186-$174. With the candles beneath their 20-SMA and 50-SMA, one other assault on backside trendline was growing available in the market.
If bears do penetrate this protection, a stronger demand zone of $163-$166 may enable consumers to mount a comeback. Close to-term help degree of $155 may additionally set off a bullish counter response if wanted.
In the meantime, bulls can be aiming for an early cut-off on the confluence of the 4-hour 200-SMA (inexperienced) and $170 worth mark. From there, a rebound above the 20-SMA and mid-line of the sample would set a 3rd prime on the higher trendline.
Reasoning
Probabilities of a parallel channel breakdown stemmed from weak readings on LTC’s Superior Oscillator and MACD. The AO, which is a gauge of market momentum, supplied promote indicators after transferring beneath its half-line submit a bearish twin peak setup. Decrease highs had been noticed alongside the MACD which threatened to ask extra promoting stress.
Lastly, the RSI was unable to maintain help across the mid-line as a result of downwards stress available in the market. Primarily based on its present studying of 42, some extra losses had been anticipated earlier than a reversal from oversold ranges.
Conclusion
LTC was on the danger of breaking south from its parallel channel- a growth which may transpire into one other 10% sell-off. The symptoms backed an unfavorable state of affairs and short-sellers had been anticipated to behave on these bearish indicators.
Nevertheless, the 4-hour 200-SMA might be the reply to many market uncertainties. A direct rebound would enable LTC to shift again throughout the confines of a parallel channel.
