LTCUSD broke out of its previous descending channel and is now starting a new bullish channel visible on its 1-hour time frame. Price is currently testing support and might be due for a bounce back to the resistance.
The 100 SMA is above the longer-term 200 SMA so the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. Also, the 100 SMA is holding as dynamic support while the 200 SMA is close to the channel support at 44.
Stochastic looks ready to head south so LTCUSD might follow suit and go for a test of the 200 SMA support or even a break lower. RSI has been on the move up but looks ready to head lower also, so selling pressure might return. But if buyers stay in control, a climb to the channel resistance at 52 could be underway.
Traders are on edge ahead of the FOMC statement this week as any change in rhetoric could have strong repercussions on global financial markets. The dollar has been weighed down by weaker CPI and retail sales the other week but bulls are still hopeful that the central bank would brush these aside as transitory factors and signal scope for more tightening.
Meanwhile, cryptocurrencies have gained some support on the bitcoin BIP 91 lock-in as this marks the step closer to the upgrade to SegWit2x, essentially avoiding a split to two versions of the cryptocurrency. This approach could be replicated for other digital assets if the need arises later on.
Market sentiment could also keep pushing LTCUSD around in the coming days as cryptocurrencies often gain support during risk-off days. In these instances, traders typically search for higher returns in alternative holdings while stocks and commodities weaken. On the other hand, a return in risk-taking could mean more losses for LTCUSD as traders flock back to traditional assets.
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