Litecoin Price Technical Analysis for 21/4/2015 – Volatility Squeeze

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Litecoin had a very quiet Monday (April 21). As the 1H char shows, it remains in the middle of a consolidation range made last week between 1.32 and 1.46.

Litecoin (LTCUSD) 1H Chart April 21
litecoin 1h chart April 21
(click to enlarge)

Here are some observations on the 1H chart:

1) Price and the 200-, 100-, and 50-hour simple moving averages (SMAs) are all merging together around 1.41. This reflects a volatility squeeze, a market that has no conviction in any direction.
2) The RSI has been holding under 60, which reflects some bias towards bearish momentum.
3) Note that the times of strongest volume coincided with bearish hourly bars. This also suggests that bears are in charge within this sideways market since last week.

Litecoin (LTCUSD) 4H Chart April 21
litecoin 4h chart April 21
(click to enlarge)

Now, if volatility start to pick up, the initial direction is not going to be as indicative as a break either above 1.46 or below 1.32. Now, the preferred scenario is the bearish one since the prevailing trend is bearish and the 4H chart still has bearish technicals:
1) Price is trading under the 200-, 100-, and 50-period SMAs which are sloping down and in bearish alignment.
2) The RSI has been holding below 60 after tagging 30, which reflects maintenance of the prevailing bearish momentum.

A break below 1.32 thus continues the prevailing trend and keeps the 1.00, parity level, and low on the year in sight.

Now, if price breaks above 1.46, let’s limit the bullish outlook, again because the prevailing trend is bearish. The range 1.32 to 1.46 is 0.12, and thus a break above 1.46 has a range breakout projection towards 1.60. We should also expect resistance here because it is a previous support/resistance pivot, and where the 200-period SMA resides in the 4H chart.

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