LTCUSD has formed lower lows and slightly higher highs, creating a triangle pattern visible on its 4-hour time frame. Price is currently testing support at 39.25 and might be due for another bounce back to the top at 42.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. This means that the triangle resistance is likely to hold as a ceiling in the event of a bounce higher or that the support could break soon.
The 100 SMA also coincides with the triangle resistance to add to its strength as a ceiling. A break past this level could encounter another barrier at the 200 SMA dynamic inflection point at 43.
Stochastic is heading lower so LTCUSD might follow suit. RSI is on middle ground but also appears to be heading lower to indicate that selling pressure is picking up. The chart pattern spans 35 to 55 so the resulting breakout in either direction could last by the same amount.
The dollar gained some support from its peers on Friday when the advanced US GDP reading for Q2 turned out better than expected. This kept many hopeful that the US central bank could still be on track towards hiking interest rates in September or December while starting its balance sheet runoff. This also confirms that the slowdown in Q1 is likely to be transitory as the Fed assessed.
Cryptocurrencies like LTCUSD are currently under pressure due to the issues in the bitcoin network. The other week, sentiment was strong after BIP was locked in but the rise of other factions like Bitcoin Cash signaled that hard fork issues are not completely gone yet. Many are waiting with bated breath for the shift that was scheduled to happen on August 1 as any troubles could lead to a massive selloff for digital assets as investors worry that these could be vulnerable to the same issues down the line.
On the other hand, a smooth transition for bitcoin would also lift other cryptocurrencies as it would assure traders that the likes of litecoin could also sidestep hard fork issues later on.
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