Even as valuation gets richer and technical indicators sound a warning, Litecoin continues to defy gravity as it closed yesterday at the highest level of the year – $3.063. Speculative buying has lifted the price even higher today, to $3.085.
However, the rally is not an opportunity to enter into the highly overbought, technically weak cryptocurrency.
Technical considerations derived from the 240-minute LTC-USD price chart have been given below.
Litecoin Chart Structure – After hitting the yearly high of $3.194, Litecoin consolidated for a brief period. With yesterday’s closing, bulls have clearly stated that they remain in complete control of the situation. Volume remains satisfactory.
Moving Average Convergence Divergence – Ever since the price hit $3.194, the Histogram began its downtrend (look at the pink bars decreasing in the chart above) – a strong sign of weakness. The MACD indicator settled at a higher level while the Signal Line added to gains. Finally, the MACD indicator closed below the Signal Line, pressing the Histogram into the negative region. MACD currently has a value of 0.2631, Signal Line has 0.2762 while the Histogram has -0.0131.
Momentum – An observation similar to Histogram has been observed in