Litecoin has dropped 6.47 percent to trade at $2.733 as the underlying negativity comes to the fore. We discussed in the previous Litecoin price technical analysis The Pressure is Evident that there is a very low probability of the price trending higher and that bears may make an early comeback.
This decline has also brought the price closer to its very important technical support of the 200-day simple moving average (SMA). The question that the trading community is now asking is: will this level cushion Litecoin once again?
I continue to remain bearish on Bitcoin as well, which I believe will force a decline in Litecoin in the coming sessions.
But take a look at the technical observations which support my negative stance on Litecoin.
Litecoin Chart Structure – After the recent rebound, Litecoin has registered a fresh closing low for the month of August i.e. $2.822, and is still reeling under pressure. The downtrend remains strong and intact.
Moving Averages – The 200-day SMA is $2.4966. If the cryptocurrency breaches this technical floor this time, expect a meltdown in Litecoin. My opinion is that it will be breached, however, it is hard to tell when exactly that might happen – may be this weekend.
Moving Average Convergence Divergence – The MACD and Signal Line show no signs of positivity. The latest values of MACD, Signal Line and Histogram are -0.3321, -0.2406 and -0.0915.
Momentum – The Momentum reading is at -0.7504.
Money Flow Index –The MFI has dived into the oversold territory with a value of 19.9498.
Relative Strength Index – The RSI is also reflecting weak sentiments with its value of 29.7807.
Litecoin is still facing significant unwinding of long positions and fresh dumping on higher levels. Market participants are advised to not go against the trend and sell on rallies. The downside target is $2.000.