- Litecoin price is likely forming a head and shoulders pattern on the hourly chart (price feed from Bitfinex).
- If the highlighted pattern is valid, then the price may break lower and head towards the all-important $3.00 support area.
- There is a lot of bearish pressure, as our previously stated resistance at $3.20-30 continued to act as a barrier.
Litecoin price may dive sharply moving ahead, as there is a bearish pattern (head and shoulders) forming on the hourly chart.
Neckline Break Near?
We mentioned in yesterday’s post that Litecoin price may head lower as there was a bearish trend line formed. Now, there is another bearish signal emerging, as a head and shoulders pattern is forming on the hourly chart (price feed from Bitfinex). The price is currently struggling to move higher and trading near the neckline support area. So, there is a possibility that sellers may break it and take the price lower in the short term.
An initial target for sellers can be around the recent low of $3.04 that holds a lot of importance. A break and close below $3.00 could increase the amount of selling pressure and ignite more losses. The price is well below the 100 simple moving average (MA), which is adding to the bearish pressure.
The hourly chart (price feed provided by HitBTC) also points to the fact that sellers are in control. There is a monster resistance around $3.30, coinciding with the 50% Fib retracement level of the last drop from the $3.39 High to $3.15 Low.
Looking at the indicators:
MACD – The hourly MACD is in the bearish zone, helping sellers.
Hourly RSI – The hourly RSI is below the 50 level, suggesting buyers are struggling to gain pace.
Intraday Support Level – $3.04
Intraday Resistance Level – $3.30
Overall, we can look to enter a sell trade if the price moves below the neckline support area.
Charts from Bitfinex and HitBTC; hosted by Trading View