Disclaimer: The findings of the next evaluation are the only opinions of the author and shouldn’t be taken as funding recommendation
Hump day didn’t account for a bullish reversal as Bitcoin opened one more day within the pink. As a substitute, its decline under $38k had a domino impact on different altcoins as they continued to maneuver south on the again of promoting strain.
Litecoin, like most of its counterparts, was sufferer to BTC’s retracement and dropped in direction of $136. Nevertheless, what appeared extra regarding was the formation of a head and shoulders sample – A setup that presents probabilities of an prolonged sell-off going ahead.
Litecoin 4-hour chart
LTC’s rebound from its 20 July low of $104 was a breath of recent air because the alt made a number of decrease peaks heading in direction of its assist line. A gradual rise in worth noticed LTC hike from $104 to $159 in simply eleven days on the again of broader market cues. Nevertheless, LTC’s dip from $159 led to the emergence of a head and shoulders sample with a neckline at $136-support.
At press time, the bears have been threatening an in depth under this bearish setup, one which might set off an extra 6.3% drop in direction of the 27 July swing low of $127.4. To invalidate such an end result, bulls would want to focus on a hike above the resistance stage of $143 and the 20-SMA (pink).
The Relative Power Index fell sharply and was heading into bearish territory on account of a whole lot of promoting strain available in the market. A reversal is likely to be stalled till this index falls into the oversold zone. The Squeeze Momentum Indicator additionally famous a rise in bearish energy and pointed to a squeeze launch.
What this meant was losses can accumulate over the subsequent few periods. Whereas the MACD moved under the half-line, its histogram registered a slight bullish divergence.
LTC seemed weak to a different 6.3% drop in worth if the worth closes under the neckline of the pinnacle and shoulders sample. Merchants can decide to brief LTC in such a situation however should watch for a breakdown affirmation as there was proof pointing to a bullish resurgence across the $136-support.