The price of Litecoin (LTC) fell below the $100 area again. What to expect next
Date: 2023-07-18 Author: Karina Ziganova Categories: BLOCKCHAIN
The price of Litecoin (LTC) fell below the critical horizontal area, thereby canceling the previous bullish breakout and promising a continuation of the decline
Despite such a bearish outlook on the daily timeframe for LTC, shorter-term indicators give more bullish signals. This is due to the presence of a bullish pattern and the convergence of support levels just below the current price level.
The Litecoin rate canceled the bullish breakout
As the results of the technical analysis of the daily chart show, the price of LTC began to decline after reaching a high of $115 on July 3. This pushed the price below the $100 horizontal area, which was then confirmed as resistance (red icon). Therefore, the previous bullish break above this area is now considered just a deviation (green circle).
LTC price currently trading around $91, approaching the $80 upward support line.
The daily RSI, meanwhile, is bearish. The index is below 50 (red circle) and falling, which indicates a bearish trend and supports the continuation of the decline.
LTC forecast: whether to hope for a reversal
Unlike the daily chart, the shorter-term four-hour timeframe offers hope for a bullish trend reversal. This is because the price is trading inside a descending wedge, which is considered a bullish pattern.
Moreover, the price is approaching the confluence of the support levels formed by the wedge support line and the Fibo level of 0.618.
Fibonacci levels are traditionally considered the most likely springboards for stopping and reversing the price after significant progress in any one direction. They can determine the limiting levels of the price movement, and it is Fibo 0.618 that often plays the role of the bottom if the price decline was only a correction.
Thus, it is possible that this area will mark the beginning of a rebound and a subsequent bullish breakout from the wedge.
However, the RSI has not yet confirmed this possibility. The indicator is below the 50 level and has not formed a bullish divergence, which often precedes trend reversals.
Despite such a bullish short-term outlook, a bearish breakout from the wedge is likely to be the catalyst for the LTC price to fall to $80.
