The intense pressure in Bitcoin market is spilling over into the Litecoin market and keeping the price subdued. As of now, Litecoin is trading at $3.98, but if Bitcoin fails at protecting its floor, expect a significant decline in Litecoin as well.
Litecoin is presently trading in the middle of a small range. The upper and the lower bounds i.e. the support and the resistance are $3.85 and $4.15 respectively.
The chart considered today is a departure what we study normally. Today’s is a 240-minute price chart taken from Bitfinex, earlier it was from BTCE.
Read on the technical considerations below.
Litecoin Chart Structure – Litecoin has been trading in the above mentioned small range for quite some time now. There have already been 5 reversals in this range, and there is a good chance that a breakout may occur in the coming sessions.
Moving Average Convergence Divergence – The MACD can be seen making an attempt to cross the Signal Line on the downside. This reflects the bearishness in the cryptocurrency and is also indicative of more future losses. The latest MACD, Signal Line and Histogram values are -0.0058, -0.0076 and 0.0018 respectively.
Momentum – The Momentum indicator has dipped into the sub-zero region with the latest value coming in at -0.0101.
Money Flow Index – The MFI is relatively strong at 54.7041, even as Litecoin remains under pressure.
Relative Strength Index – The underlying strength is still in favor of the pessimists; the 14-day RSI value is 47.3451.
I am expecting the pressure in the Bitcoin market to increase and lead to another 5-7 percent cut in the price. That is expected to put significant burden on the Litecoin bulls.
Therefore, do not trade Litecoin at current levels or even in this range for now. Wait for a range breakout for clear directional signals before entering the market.