Litecoin started the week putting in a price top. The 1H chart shows LTCUSD completing a double top, or essentially breaking below a range when it fell below 1.40. However, price bounced up from 1.36, and held above 1.38 for the most part to form a double bottom, or simply another range. Eventually during the May 7th session price ended up rallying back into the “price top” thus invalidating it as a top. Overall this is a choppy mess and there should not be any directional clues after this week’s price action so far.
Litecoin (LTCUSD) 1H Chart May 8
(click to enlarge)
Calling litecoin neutral would be a reasonable assessment in the 1H chart. But the market is never truly neutral. We can say that there is a slight bullish bias. The fact that the market failed to confirm the price top shows that bears are weak. The strength of the May 7th rebound should also add to the slight bullish bias. Furthermore, the RSI pushed to 80, which shows strong bullish momentum in the near-term.
Now we need to confirm this bullish outlook. If the market can stay above the 1.40 level, preferably above 1.42, there should be a bullish outlook entering the weekend, especially if the 1H RSI holds above 40.
The 4H chart shows that the choppy mess has been going on since mid-April. While the 1H chart shows a slight bullish bias, the 4H chart shows a market that is still relatively bearish. However, we might be seeing a change to that, especially if price can push above 1.50 this week. That would clear above the 200-period SMA, and would put the pressure back to the 1.62 level. 1.62 is the high of the 4H candle that spiked down to 1.00.
Now if price falls below 1.40, and the 1H RSI falls below 40, we would have pressure back towards the 1.30 level.
Let’s just wait and see if price can test and hold above 1.40 before making any directional judgement. Since litecoin is currently above 1.40, the bias is bullish in the short-term, but the outlook should be limited to 1.60-1.62 for now. If price then starts respecting the 1.48-1.50 area – current resistance – as support, then we can say the market has turned bullish. Otherwise, it would simply be a bullish correction.
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