Since last week, litecoin has developed a consolidation range roughly between 1.32 and 1.46. This week, price action has been quiet coiling around the 1.40 handle as we can see in the 1H chart.
Note that the 200-, 100-, and 50-hour SMAs all merged around 1.40. At the end of the April 22 session, ltcusd rallied with relatively higher volatility and volume. Meanwhile, the RSI has popped up above 60, which represents loss of the prevailing bearish momentum. The bounce off of the cluster of SMAs puts litecoin in a bullish outlook, first to test the 1.46 consolidation high.
As we have been discussing over the past few litecoin updates, A break above 1.46 targets the 1.60 handle. This would be 0.14 above 1.46. As you can see, this projection is based on the width of the current range. Now, the current rally that is testing the consolidation resistance is already a volatility breakout. We can’t always be confident of a volatility breakout, especially since in this case, price is still under the 1.46 resistance.
Now, if price pulls back , it should hold above the 1.40 handle, where the current rally bounced off of. The 1H RSI should also hold above 40. That is, if the market is indeed bullish in the near to short-term.
However, a break below 1.40 would put pressure back on the April low of 1.32. This scenario would be in-line with the prevailing bearish trend, which actually extended to 1.00 for a brief moment. The bearish outlook for now will be a decline towards 1.0, to chew through the tail caused by the spike on April 9.
Now let’s say there IS a bullish correction. We should monitor the 1.60-1.61 target. This is also where the 200-period SMA resides, coincident with a previous support pivot.
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