LiteCoin (LTC/USD) Analysis November 30, 2017
Like most cryptocurrencies, LTC is testing all-time highs and with the way technical indicators are set, there is more potential for further expansion.
With positive sentiment around cryptocurrencies and block chain technology in general, investors are under-valued digital assets are hot targets. In my opinion, assets like LTC could end up benefiting from this capital injection since they look underpriced when compared to BTC.
Anyway, after reversing from the 61.8% Fibonacci retracement level, price action is now testing the all times highs of around $99 last printed in early September.
Trend continuation is conditional and suppose there is a close above $100 and bulls manage to keep prices above those levels then we expect LTC to test the 61.8% Fibonacci extension level at around $155.
This of course is dependent on momentum of which stochastic shows it is strong. We have diverging %k and %d meaning chances of a break above $100 are high.
In the daily chart, it is obvious that price action is trending inside an ascending channel. At current prices, LTC is testing the resistance trend line or the upper limit of this channel.
As previous price action shows, reversals tend to happen when this resistance trend line is tested. Check out May 10, June 19, July 6 and what happened shortly after current highs were tested on September 1.
All of these reversals happened when stochastics were over-stretched to the upside just like it is now.
The thing is, if LTC fails to close above September 1 highs of $99, then a double tops will be formed. Such a set up at these two resistance levels mean entry of sellers and USD bulls should start loading their positions.
The first thing you notice in the 4HR chart is that bearish divergence. The move up after November 25 was backed by nothing other than hot air and should there be a strong break and close above $100, then we can be sure that LTC buy sentiment is high.
Otherwise, LTC might depreciate to correct this over-valuation with bears eyeing $82 and $85 support zone. For that to happen, price action must close below the 20 period and the minor support trend line with a strong bearish candlestick confirming that.