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LTCUSD has continued to form lower highs and has dropped close to the bottom of its descending triangle pattern. Price is also consolidating inside a falling wedge pattern and could be due for a breakout soon.
The 100 SMA is below the longer-term 200 SMA so the path of least resistance is to the downside. In addition, the 100 SMA dynamic resistance is close to the top of the triangle, adding to its strength as a ceiling. A larger bounce could test the 200 SMA dynamic inflection point near 60.
Stochastic is already dipping into the oversold region to indicate exhaustion among sellers. RSI appears to be turning higher but could also be cruising sideways to indicate further consolidation. Reversal candlesticks at the triangle support around 54.50 could mean that a bounce is in order.
The chart pattern spans 54.50 to 68.25 so the resulting breakout could be of the same size. However, the lack of catalysts for litecoin could keep this cryptocurrency inside the consolidation pattern for a few more days or weeks.
Volumes for LTCUSD have taken a hit, and so has volatility. Investor attention has been mostly focused on bitcoin as it recently reached new highs again. There have been no major updates from litecoin itself, which explains the fading investor interest.
Meanwhile, dollar demand is also being supported by mostly upbeat medium-tier U.S. data and speculations that Trump still has a possibility of appointing a less dovish Fed head. Either way, the official announcement could lead to a strong dollar reaction across the board and impact LTCUSD movement.
Persistent geopolitical risks, however, could keep litecoin afloat above the triangle support. Apart from that, risks from the hard fork in ethereum and the bitcoin network upgrade could bring traders back to LTCUSD. There have also been rumors that China could reverse its bitcoin ban and this might be bullish for cryptocurrencies in general.