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Litecoin (LTC) is due to an upward correction following a sharp fall which followed a breakdown of the market structure. As the LTC / USD daily chart shows, Litecoin (LTC) failed to recover despite several attempts. The downward momentum has been strong and the bears remain in command now. The price attempted to exceed the 10 day EMA, but failed. The RSI for LTC / USD has now met strong resistance and has room to continue its decline. Litecoin (LTC) will rise again to test the previous market structure at $ 50 but not before going down further in the days ahead. That said, a further disadvantage at this stage will be limited and the recovery will be rapid. At this stage, short positions with high leverage are therefore inadvisable.
There have been opportunities for Litecoin (LTC) to make an inversion in the last days. However, this type of inversion would have been too easy and direct. This is not how inversions occur. At every reversal point in a market, there must be a struggle between bulls and bears marked by confusion over its outcome. During this fight, investors get mixed signals that can sometimes be very misleading. A lot of times traders see the price fall behind after trying to break out and take it as a sign of weakness. Selling in that weakness without waiting for it is more often a mistake that most traders make. Some take it as a sign of further decline and run out of margin just to blow up their bills.
Long candle wicks that we see on the charts just before a trend reversal is taken only as a sign of fighting between bulls and bears. It should not be taken as a sign of weakness or strength, because the struggle is not over until only one of them has remained standing. This can sometimes mean losing ideal entry points, but it's worth it. There is no lack of opportunities in this market. Do not trade as if this was the last chance you will get. Litecoin (LTC) was here before and will be here in the future. Litecoin (LTC) has now completed an extensive correction that puts it close to its bottom. The right approach at this point would be to think about maximizing the amount of Litecoin (LTC) that you can buy, not sell.
If we look at the LTC / BTC 1D chart, we can see that Litecoin (LTC) has clearly broken the market structure against Bitcoin (BTC). When this happens, the previous support becomes a strong resistance. In other words, Litecoin (LTC) may not be able to break this resistance against Bitcoin (BTC) at any time. Now, some might consider it a worrying quip for the losses they incurred by buying at higher prices on the market, while others would consider it an opportunity to accumulate in the long run.
