In the previous Litecoin price technical analysis Flat Action, we discussed that if Litecoin fails to cross the resistance posed by the level of $3.160, it runs the risk of entering into a range. As can be seen, Litecoin has plummeted 4.44 percent to $2.907 as traders resorted to profit taking near the resistance.
Another factor weighing on Litecoin is the weakness in the Bitcoin market. However, the good news is that Bitcoin is now close to its support level of $235.
Values from the technical indicators overlaid on the daily LTC-USD price chart also suggest that there is an increased probability of the cryptocurrency entering into consolidation phase as both the bulls and the bears fail to get their act together.
Litecoin Chart Structure – We discussed in the previous Litecoin analysis about a possible price range of $2.500-3.160. Since this is a big range, Litecoin may trade sideways within these limits before breaking out.
Litecoin now receives cushion from the 9-day simple moving average of $2.8606.
Moving Average Convergence Divergence – The Histogram takes a cut in the value to 0.0785 while both Signal Line and MACD languish in the negative territory. The latest values of MACD and Signal Line are -0.1860 and -0.2645 respectively.
Money Flow Index – The MFI, with its neutral value of 51.5340, fails to add any value or provide any indication except that at least a brief consolidation is in the offing.
Relative Strength Index – The RSI, which after consistent struggles, crossed the 50-mark is again down to near-40 levels. It is now at 41.4931.
Today’s technical analysis suggests that market participants should prepare for range trading until a breakout happens. The strategy is simple: Short near the resistance and buy near the support. Place stop-losses beyond the respective technical levels to avoid huge losses.
Keep track of the Bitcoin markets because of its leading influence on Litecoin.