Just yesterday I discussed the possibility of a major breakout in Litecoin along with a price target of $1.60. The breakout did happen, and the price touched a low of $1.63 before stabilizing around $1.66.
The collapse in Litecoin price happened in concurrence with the 8% crash in Bitcoin price, and with expectations of Bitcoin touching $230 rising, Litecoin may witness a more pronounced fall in the coming sessions.
Image: https://www.tradingview.com/x/ovU4bd9a/
Analyzed above is the 240-minute LTC/USD price chart covering the period from late January to date.
Chart Structure – Litecoin has broken below the support trendline (marked as blue in the chart above) and has taken support from the medium-term support level of $1.66. As can be seen, the level of $1.66 has been respected by the market on 3 occasions since February. If the bulls cave in to the selling pressure and the support is breached, extremely deep downsides may open up.
Moving Average Convergence Divergence – The MACD, the Signal Line, and the Histogram value have turned negative following the debacle. The latest readings of MACD, Signal Line, and Histogram are -0.0376, -0.0223, and -0.0153, respectively. With momentum indicator turning negative, Litecoin price may remain under pressure for some more time.
Momentum – The Momentum indicator has experienced collateral damage. The reading has slumped to -0.1240 in conjunction with the panic selling.
Relative Strength Index – Bulls have barely managed to keep the RSI value above the oversold territory, which is evident from the latest reading of 31.8636.
Bitcoin, being the leading cryptocurrency, has always had a bold effect on the price action of Litecoin. However, it remains to be seen whether a further decline in Bitcoin will be sufficient to force Litecoin below the crucial support level of $1.66. Short-term traders are advised to sell on rallies. Shorting at current levels should be avoided as the altcoin may jump in the near term.