Litecoin was not spared during the sharp decline on Wednesday. Its price fell 14%, from 51 to 44 $. Below we will present an analysis of what could happen in the following months.
A look at the weekly chart shows that the price has suffered a resistance from the 9-day SMA (Simple Moving Average) from the bearish cross (SMA of 9 days on SMA to 26 days) in July 2018. The next area of possible inversion would be the range 33-40 $ formed by the support of July 2017. The same area corresponds to the 200-day SMA (white line), which could also offer price support. Also, it is worth keeping an eye on the MACD, as it is losing power and could create another bearish cross.
A look at the daily chart gives us an equally sad vision. Litecoin came out of the descending triangle that had exchanged 92 days with a large volume, and the MACD dropped dramatically with a similar volume. If the price falls for the entire length of the triangle, it will follow with a drop in the bass area 30, which corresponds to our long-term vision.
Finally, a look at the weekly logarithmic scale shows that a reduction in the area of 33-40 $ would correspond to the highs during the 2013 upward trend, which offer significant support. Therefore, a comprehensive study of the indicators and the previous price action identifies the $ 33-40 as the most likely area for an inversion.
While most indicators indicate a sustained fall, it is worth keeping an eye on the alternative scenario, in which this was a bear trap, and Litecoin emerges from the descending wedge. In this case, the length of the wedge should provide for a short-term uptrend market in the area of $ 75-90, which would correspond to the fib level of 0.382 in the recent autumn and the July-August support.
- Litecoin decreased dramatically during the fall of the 16 November cryptocurrency.
- The next support area is 33 $ -40 $, formed by previous highs + 200-day SMA.
- A less likely alternative scenario would take us to around $ 80 at the end of November.