Yes, the bearish triangle pattern which we have been discussing in the past several Litecoin price technical analyses has been confirmed as Litecoin has breached the pattern on the downside.
Litecoin is currently trading at $2.730, down 2.92 percent as Bitcoin sets itself up for a breakdown.
Apart from the breakdown in the chart structure, market participants should also remain up to date with the latest technical indications presented below.
Litecoin Chart Structure – As Litecoin breaks from the short-term pause, I am expecting it to test the crucial support level of $2.000, which is also my target for the month of September.
Moving Average Convergence Divergence – The MACD has closely aligned with the Signal Line, and has pushed up the value of the Histogram. The latest values of MACD, Signal Line and Histogram are -0.3253, -0.3149 and -0.0104 respectively.
Momentum – The underlying momentum is strongly in favor of the bears, which is also confirmed by the Momentum reading of -0.5955.
Money Flow Index –The MFI remains in close contact with the oversold boundary; the 14-day MFI value is 23.5482.
Relative Strength Index – The latest 14-day RSI reading is 30.0203, just above the oversold criterion of 30.
Now that we have a confirmed breakdown, I believe that market participants should rush into the opportunity to short Litecoin at the current level for a target of $2.000. Place a tight stop-loss for the trade just north of the recently breached floor.
The 200-day SMA near $2.500 can only provide brief support to Litecoin.
The weakness in the Bitcoin market is also expected to fuel the fall in Litecoin valuation.
Market participants are advised to not confuse the weak momentum and strength readings as indications for a rebound, but rather see them as strong signals confirming the bearishness in the cryptocurrency. Expect the volatility to see a jump in the coming sessions.