Analysis provided by Ashton Fraser, learn more about his trading strategies with the Forex Reversal indicator.
After a drop from 18.72 to 15.1 over the past few days, Litecoin is showing some signs of recovery.
Taking a closer look at the LTC/USD chart below on the four hour time frame (click to expand):
After the strong hike in early March, Litecoin has been dropping steadily, as shown by the orange arrows on the chart. Barring one minor retrace, we can see how smooth the downtrend was, with the Stochastics starting in an overbought position, heading down, with its gradient not being too steep, but rather a gradual southern movement. In addition the Awesome Oscillator was red for most of the sell, only three candles were green which were due to the pullback just mentioned.
Even then, if we examine those few pullback candles, circled in white, we can see how they were telling us price was still likely to continue down, since their upper wicks were very long, and the Stochastics were still in a smooth bearish trajectory.
Come Sunday, a new week, a new trend, price reversed due to a number of corroborating technicals, before consolidating for some time, without showing many signs of a clear direction, as mentioned in yesterday's analysis.
That is, until right now. Check out the blue ellipse. Strong bullish candle, bullish Accelerator , bullish Awesome, bullish Stochastic. The only issue was, that candle was prevented from rising higher due to the 38.2% Fib level at 16.5. However, the latest candle didn't care much for 38.2%, smashing right through it with ease, managing to just touch 61.8% at 17.34, before pulling back a few pips.
So the technicals look bullish, however I expect a pullback to at least 50% later today, before another attempt at breaking 61.8%.
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