Litecoin has broken above the neckline of the Reverse Head Shoulders pattern which sets its next target at $1.800. But, the upside breach is not convincing enough; the technical indicators do not display strong optimism and the post-breakout price action fails to inspire confidence to buy.
Litecoin is presently consolidating above the neckline at $1.700.
A technical analysis of the 240-minute LTC/USD price chart prevents me from buying into this market trap.
Litecoin Chart Structure – Even though Litecoin has broken above the neckline level of $1.690, it has not made any significant attempts to scale higher. Currently trading at $1.700, Litecoin must respect the support and repeatedly challenge the resistance if it is to continue rising.
Fibonacci Retracement – With this breakout, Litecoin has maintained its stance above the 61.8% Fibonacci retracement level of $1.668. As can be seen from the chart above, the cryptocurrency recently retested this support level. The bulls must now quickly overcome the 50% retracement resistance if they are to achieve the final target of $1.800.