It seems that the big negatives I mentioned in my previous analysis are coming into play, and well.
Since yesterday, Litecoin has crashed in excess of 12% and is now trading at $3.980. If Litecoin fails to recover these losses and closes today’s session below the strong support of $4.100, we may see a huge decline of 25% in the coming sessions. And I strongly believe that we will see lower levels.
Let’s take a look at the technical analysis of the daily LTC-USD price chart above.
Litecoin Chart Structure – Litecoin had been consolidating above the support level for a considerable time, leading many to believe that a bottom may have been found. But, with technical indications working against this action, it was always a trap!
During the ongoing collapse, Litecoin hit a low of $3.805 before paring some losses. However, I expect the cryptocurrency to witness increased selling pressure on every rise.
Moving Average Convergence Divergence – The correction has seen the Histogram register a value of -0.3091, the lowest since June. MACD is constantly hitting lower grounds and is currently at 0.4024 while the Signal Line is maintaining its healthy stance with a value of 0.7115.
Momentum – The Momentum indicator has dropped further into the negative zone, slumping to -1.3700.
Money Flow Index – The MFI continues with its downward bias and is now at 43.6643.
Relative Strength Index – The pessimism has weakened the cryptocurrency which now has an RSI value of 48.7557. It must be noted that Litecoin had been maintaining above 50 levels for more than a month till yesterday.
I anticipate a further devaluation in the cryptocurrency, at least down to $3.100. Build short positions at current levels or on a rise by placing a strict stop-loss (closing basis) above $4.100 for the mentioned target. Expect the target to be achieved by the end of the week.