- Litecoin price surged higher and traded close to $9.00 where there was a major selling interest.
- The price declined heavily and fell by more than 25% to trim most of its gains.
Buyers managed to take prices higher, but they failed to maintain gains which ignited a downside reaction.
Litecoin price once again moved higher as forecasted in this past week’s weekly analysis. There was a sharp upside move taking the price towards $9.00. The price failed miserably around the mentioned resistance area, which ignited a downside move.
Importance of a bullish trend line
There is a bullish trend line formed on the 4-hours chart, which is acting as a support for the price and might continue to help buyers. The best part is the fact the 100 simple moving average on the 4 hours chart is aligned with the highlighted bullish trend line. Moreover, the Lower Bollinger Band is also sitting around the recent low of $2.71. In short, the stated level might turn out to be a major support area in the short term, and if it holds a correction is likely.
However, it would be very tough for buyers to take the price higher to a great extent. On the upside, an initial hurdle is around the 38.2% Fib retracement level of the last drop from $8.90 to $2.71. Furthermore, the 50% Fib level is colliding with the Middle Bollinger Band, which means $6.34 is a major resistance zone. As long as the price is above the 100 SMA (H4), a minor correction is very likely.
Intraday Support Level – $2.74
Intraday Resistance Level – $5.72
The H4 RSI is around oversold reading, which supports the view of a correction. On the other hand, the MACD is under a divergence signaling more losses.
Charts courtesy of Trading View