Litecoin hit a high of 11.4 this morning, only to be rejected by a certain Fibonacci level. Will we see the bears take control?
Let's take closer look at the current LTC/USD Daily chart below:
I’ve performed the Fibonacci study from the high of the month on the 16th at 14.23, until the low of this week on Monday, at 9.6, a drop of around 33% in barely two weeks.
But it's the retrace we're interested in right now. As can be seen, price rose to just below 11.4 today, which was the 38.2% Fib retracement line, (marked in red), and it's bounced straight back down almost 23.6%. This was aided by some corroborating technicals on the H4 timeframe, as we can see below:
Look at the candle marked in white; a number of factors combined here:
a) The upper wick was the same length as it's body.
b) The upper wick was entirely contained outside of the Bollinger Bands.
c) The Accelerator Oscillator had turned red.
d) The Stochastic Oscillator were in overbought territory, and beginning to cross down.
These factors on their own are often enough to help price push down, but when you combine that with a resistance level by way of Fibonacci (in this case the 38.2% Fib), especially on a higher timeframe, then it's almost inevitable we're going to see a bounce.
On the other hand, we do have the Accelerator and Awesome as green on the Daily, whilst the Stochastics might cross over soon, so actually I expect price to jump back up and re-test 38.2% at 11.4 later this week.
