Litecoin Price Analysis: Falling Wedge Forms As LTC Dumps
Over the last week, Litecoin (LTC) price has lost 25% of its value dropping from around $80 to $55. Since then a falling wedge has formed stemming from the highs. It’s likely short-term price action will see bearish relief and continue to range within the wedge parameters.
Litecoin 1-Day Analysis
On the 1 Day chart for LTC/USD we can see a falling wedge has formed stemming from the yearly high around $145 as shown in my previous analysis, Since then price levels have now dropped to the current market price of $55 around the important 23% Fibonacci level. The 200 EMA has cut through the falling wedge resistance line and will now act as a magnet causing price action to bounce around $55 up towards the resistance around $60 over the short-term.
Volume has begun to uptick over the last 24-48 hours as price levels near the bottom of the falling wedge. RSI has clearly turned oversold and signals selling pressure is well in control. Key support levels to look out for if price levels break below the wedge support at $55 are $50, $43, $39, and $35.5. These are key levels to either take profit on shorts or consider scaling into long positions.
Litecoin 1-Hour Analysis
On the 1 hour chart for LTC/USD, we can see the recent sell-off that causes price levels to drop so severely. RSI has regained strength as market price trades just above the wedge support. Providing volume increases and buyers enter the market around this point it’s likely LTC will bounce and head back towards $65 before continuing to range.
RSI creating an ascending line whilst price action continues to fall typically is an indication of bullish divergence. This in conjunction with the fact price levels are so close to the support line of the falling wedge leads me again to believe there will be a short-term bounce over the coming days. However, this does not mean that there will be a dramatic increase such as a breakout to the upside of the falling wedge, merely just a continuation of price action ranging within the falling wedge.
Volume levels will need to increase by a minimum of twice the current 24-hour volume level seen on LTC/USD in order to sustain any form of upwards movement. In order for price levels to actually break upwards through $65 resistance and see a dramatic breakout volume levels will need to increase by a minimum of three times the current volume level.
Do you think Litecoin price will bounce off $55 and head towards $65 over the coming days? Please leave your thoughts in the comments below!
Images via Bitcoinist Image Library, LTC/USD charts by TradingView
This article is strictly for educational purposes and isn’t to be construed as financial advice.