Litecoin falls 1 percent as Bitcoin extended its slide over the weekend. Now at $3.899, Litecoin is in a strong downtrend and price advances can be used to go short in the counter with tight stops in place.
Technical analysis of the daily LTC-USD price chart conveys that pessimism still weighs on the cryptocurrency and good profits may be made on creating short positions at extremely low risks. But practicing the stop-losses is the key!
Litecoin Chart Structure – The price chart conveys that Litecoin is trading in a lower top, lower bottom structure (marked in the chart), where repeated attempts to breach the resistance have failed. As of now, the resistance is at $4.000.
Moving Average Convergence Divergence – The MACD has joined the Histogram in the negative territory; MACD has a value of -0.0567 and Histogram has a value of -0.0887. The Signal Line is barely positive at 0.0320.
Momentum – The Momentum indicator sustains its negative outlook with a value of -0.6814.
Money Flow Index – The MFI has continued with its drop to 33.9967.
Relative Strength Index – The RSI of 45.4395 is reflective of the lingering weakness in Litecoin. It also indicates that the price may snap if some negative news hits the market.
Litecoin is near a very important resistance level from a near-term perspective, and therefore, it makes sense to create short positions. Market participants should put in place tight stop-losses above the mentioned resistance for a target of $3.700.
Since Bitcoin markets majorly affect Litecoin, traders must track the movement in the leading cryptocurrency as well. Bitcoin may witness minor short covering or consolidate at the current level, and therefore, it may prevent a big decline in Litecoin.
Create light long positions if the cryptocurrency breaks the downward resistance for a target of $4.300.