Litecoin [LTC]: How traders can leverage these profitable outcomes

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Dis­claimer: The find­ings of the fol­low­ing analy­sis are the sole opin­ions of the writer and should not be con­sid­ered invest­ment advice.

The ongo­ing mar­ket-wide liq­ui­da­tions pulled Lite­coin [LTC] toward its long-term sup­port around the $42-zone. The drop below the $61-zone affirmed the strength of its month-long descend­ing tri­an­gle on the 4‑hour timeframe.

A poten­tial close below the imme­di­ate sup­port range could boost the chances of a $47-zone retest before any trend-com­mit­tal move. At press time, LTC was trad­ing at $53.03, up by 14.02% in the last 24 hours.

LTC 4‑hour Chart

Source: Trad­ingView, LTC/USDT

The altcoin’s height­ened sell-off led it to test the $61-resis­tance mul­ti­ple times over the last month. While the bears ensured the low­er peaks, LTC saw an expect­ed descend­ing tri­an­gle break­down towards its Point of Con­trol (POC, red).

As a result, LTC plunged to touch its 23-month low on 14 June. After a brief com­pres­sion phase, the 61.8% Fibonac­ci lev­el coin­cid­ed with the six-week trend­line resis­tance (white, dashed) to pose a stiff hur­dle. Thus, LTC dis­played a strong rejec­tion of high­er prices around the $55.8‑zone.

With the 20 EMA (red) final­ly look­ing north, a bull­ish crossover with the 50 EMA (cyan) can posi­tion the alt for a sus­tained near-term uptrend.

An imme­di­ate rebound from the $50-$51 range can help buy­ers retest the trend­line resis­tance before a like­ly pull­back. Any close below the 20/50 EMA could expose the alt for a fall towards the $44-$46 range near its POC. 

Rationale

Source: Trad­ingView, LTC/USDT

The Rel­a­tive Strength Index (RSI) final­ly saw a reli­able close beyond the mid­line on its north­bound tra­jec­to­ry. Any close above the 61-lev­el would help buy­ers main­tain a near-term edge.

Also, the DMI lines exhib­it­ed a buy­ing edge. But, the ADX [direc­tion­al trend] stood sub­stan­tial­ly weak for LTC. Also, the bear­ish diver­gence on the CMF could aid the sell­ers in test­ing the $50-mark sup­port on the chart.

Conclusion

Giv­en the con­flu­ence of the 61.8%-level, trend­line resis­tance, and a poten­tial bear­ish diver­gence on the CMF, LTC could like­ly see a rever­sal from the $55-zone. A fall below the 20/50 EMA would trig­ger a short­ing sig­nal with tar­gets as men­tioned above.

How­ev­er, LTC shares an 85% 30-day cor­re­la­tion with the king coin. A close eye on Bitcoin’s move­ment would be imper­a­tive to make a prof­itable move.

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