Litecoin is currently trading at $2.922, up 1.78 percent as the cryptocurrency extends its short covering-fueled rally. However, I do not see Litecoin advancing significantly from here on and expect the bears to make a comeback very soon.
What is aiding my bearishness is the lingering pessimism in Bitcoin, in addition to the technical considerations derived from the daily LTC-USD price chart.
Many of the participants have repeatedly asked me why I did not factor in or mention the block reward halving in my earlier analyses. It is because I always believed that the market had priced in that well, and any accompanying move would be purely speculative. Now that the mining reward halving has been achieved, there has been no major shakeup in the Litecoin market.
Litecoin Chart Structure – For the past couple of sessions, Litecoin has been limited to a high of $3.051. If the cryptocurrency fails to reach a level higher than this in the future sessions, then expect another steep fall.
Moving Averages – Litecoin recently took support from the 200-day SMA before rebounding. If it falls again, I am expecting it to pierce this very important technical support which comes in at $2.4920.
Moving Average Convergence Divergence – Even the price rise is failing at arresting the decline in MACD and Signal Line which have plummeted to -0.3044 and -0.2195 respectively. The Histogram is at -0.0849.
Momentum –The Momentum reading is negative at -1.0279.
Money Flow Index – The MFI is awkwardly balancing itself near the oversold territory with a value of 25.0871.
Relative Strength Index –The RSI is depicting weak strength with the last observation of 32.5558.
The technical indicators overlaid on the Litecoin chart are foretelling of the underlying negativity. Remain short on Litecoin by creating positions now or on rallies by maintaining strict stop-losses.