Litecoin price has jumped 3.35 percent to $3.980 after retesting the downward sloping support line.
In the previous Litecoin price technical analysis Cautiously Optimistic, I had revised the support level to $3.720 and suggested that a weakening Bitcoin could add more pressure on the Litecoin bulls. As Bitcoin came down with a thud, Litecoin also tumbled to a low of $3.764 before gaining positive momentum. Short covering may have also helped the bulls’ cause.
Technically, Litecoin is still on a slippery slope but rising after retesting the support should give confidence to the buyers. Take a look at the technical considerations derived from the daily LTC-USD price chart.
Litecoin Chart Structure – The support for Litecoin slips lower owing to the downward nature of the trendline. The cryptocurrency can now find cushion at $3.670, lower than the previous support of $3.720. For a bullish case, Litecoin must cross $4.150 at the earliest.
Moving Average Convergence Divergence – The MACD, Signal Line and Histogram have all been sustaining in the negative region. The respective values of -0.0764, -0.0350 and -0.0414 do not instil significant confidence in the buyers.
Momentum – The Momentum indicator shows bearishness with a value of -0.3429.
Money Flow Index – The MFI is still lingering near the oversold territory with an observation of 26.3422.
Relative Strength Index – The 14-day RSI is at 47.6989.
Litecoin can be bought on dips down to the support line by placing a tight stop-loss. Long trades should be supported by a favorable risk-reward ratio and according to personal risk preferences.
Bitcoin continues to have a leading effect on Litecoin market, and therefore, it becomes imperative to keep a track of the price action in Bitcoin. If Bitcoin pierces $260, expect a negative action in Litecoin as well.
It is hard to say how the Litecoin would perform during the weekend, and hence, market participants should create trading positions only at the low-risk levels such as the support.