LiteCoin (LTC/USD) Analysis November 13, 2017
We cannot ignore the importance of higher time frames irrespective of how slow they move. Clearly in the weekly chart, LTC surge has been impressive. Despite growth in multiples over a short span, the point is whether this cryptocurrency will continue to grow in the long term.
Technically, opportunity for short term growth is present if the behavior of our technical indicators are considered as leads. For example, the 20 Period MA has been effective in preventing further LTC depreciation in the last three quarters of 2017. There was a bear divergence pattern between April and August but the consequent LTC depreciation was contained.
If we paste a Fibonacci retracement tool between February lows at $3.8 and August highs of $98, we note that all points of support and resistance somehow lies along key Fibonacci correction levels. Extending this trait, we expect resistance around the 68.2% Fibonacci level and this is where prices are currently trending at. Resistance will be placed at around $64 and $69.
Even though there is a stochastics buy signal in place, we shall and see what happens at the weekly resistance lines in the lower time frames.
It is important to know that the current LTC price action is moving below the main support trend line which was broken through on September 13. That support trend line is now our resistance trend line. Notice that this support trend line was retested on September 18, 27 and on October 15 where USD bulls pushed prices lower after an Evening Star pattern was formed at the overbought territory.
Now that prices pushed back higher after LTC bulls broke above resistance line at $57, we expect reaction at around $64 and $69. It goes without saying that these two levels also coincides with the resistance zone in the weekly chart.
Our game plan will be as follows. First off, there is a price action bearish divergence relative to the stochastics which are also turning from over bought zone. Secondly, check the price action lower lows relative to the upper BB. After LTC was overpriced on November 7, LTC prices moved higher with no momentum. I will look to short after the current candlestick close with stop losses above October 15 highs of $68.
