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Disclaimer: The results of the following article are the sole opinion of the writer and should not be taken as investment advice
The Litecoin market has seen a resurgence in the wake of Bitcoin’s recovery. The asset price was close to $ 89.24 and consolidated between $ 90.83 and $ 85.26.
The current market has gotten closer and closer to selling pressure and the appropriate time for a short position.
Litecoin 1 hour chart
Source: LTC / USD on TreadingView
According to the chart above, we can see the price rise along with an ascending channel. However, as the price passed $ 85, it consolidated. The current price is at a resistance point, but as the asset purchase has gained enough momentum, there may be a decline making its way into the market.
Reasoning
The consolidation of the LTC price is visible in the chart. While there has been constant bullish pressure in the market, there has been strong buying sentiment in the market.
The relative strength index indicated this over-buying of the asset. The RSI signal had long been in the overbought zone, but has recently sunk into the equilibrium zone. The current RSI value was 64 and has moved between 64 and 70, which is even closer to the overbought zone. There are more possibilities due to what the price will have to adapt closer to the equilibrium level where the selling pressure and buying pressure will be equal.
Positions
Entry for a short position: $ 89
Take Profit: $ 85.26
Stop Loss: $ 90.87
Risk / reward ratio: 1.99
Conclusion
As the digital asset has been overbought at the moment, there may be selling pressures entering the market. Support has been developed at $ 85 and $ 80 if the price slides lower, however, the overall trend has been bullish at press time.
