Litcoin vs Bitcoin hiked big time yesterday, fuelled by price hitting a certain confluence of support zones.
Let's take a closer look at the LTC/BTC chart on the H4 timeframe below:
There are two primary reasons from a technical standpoint as to why price rose like it did yesterday.
Firstly, if we perform our Fibonacci study from the low of March's crash at 0.02686, to the highest point since then at 0.02866, we can see how April's low at 0.02395 was actually a Fibonacci extension level, specifically 261.8%, circled in blue.
Then, we also have the red trendline offering significant support, as the market has already tested this line thrice previously, circled in yellow, with the latest test occurring yesterday morning of course, again circled in blue.
Thus, we have two major reasons for such a hike, i.e. an amalgamation of key support lines, providing the impetus for the thrust we've just seen.
Now, if we zoom in closer, and apply a Fib study for the latest swing, i.e. from the low of the month at 0.02395, to the latest high at 0.02607, as seen below...
... then we can see how the Stochastic Oscillator is in an overbought position, with its K period and D period now coming together - so we could expect the K to cross under the D very soon, I'm liking the smooth nature of the transition. In addition, we have the Accelerator Oscillator having turned red half a dozen candles ago. In short, we're probably going to be seeing price break the 23.6% Fib level sooner rather than later.
