Litecoin skids 4.5 percent to $2.970 as profit booking hits the market. We had stated about the same possibility in the previous Litecoin price technical analysis Long Call Pays Off that buyers should wait for a dip now or risk losing money.
The price action over the past 24 hours warrants another close examination of the daily LTC-USD price chart.
Litecoin Chart Structure – As the fall accelerated, Litecoin plummeted to an intraday low of $2.910 before recovering. It must also be noted that the cryptocurrency retested the breached resistance line on the decline, and it may prove to be a highly rewarding opportunity for the bulls.
There is one concerning aspect as well. The cryptocurrency, which earlier looked like having successfully scaled the 150-day SMA and the 50-day SMA, eventually closed below them. They are expected to act as the near-term ceilings.
Moving Average Convergence Divergence – The Histogram maintains its positive stead with a value of 0.0381 as MACD and Signal Line lose losses.
Momentum – The Momentum value has dropped from 0.2621 to 0.1480.
Money Flow Index – One very ominous indication is the overbought signal coming from the MFI, which is now at 77.7040. Rising MFI and falling price is a negative divergence that buyers should take into account.
Relative Strength Index – The RSI value has toned down a bit to 52.2540 to reflect the shaky sentiments.
Market participants are advised to buy this dip for small gains only. Place a tight stop-loss below the breached trendline for a target of $3.100.
In case, the cryptocurrency closes below the mentioned trendline, consider building light short positions.
The choppy action in the Bitcoin market is also hampering the upmove in Litecoin. Further weakness in Bitcoin will only pose problems for Litecoin.
Do not expect big price moves in the next 24 hours.