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Given that the price of Litecoin is approaching significant resistance in this analysis, we will discuss a possible direction of a breakout.
Analysis
Looking at the LTC / USD daily chart we can see that Litecoin's price is in a very difficult situation. Since May 6, the price has been falling, tending to seek support and, as you can see, it has found support and is currently testing significant levels of support as the price hit the low of $ 49.236 on 14 August. From that point down, the price is back to $ 61 which is higher than the resistance of the range at $ 57.344 but has quickly returned to the inside of the range.
As you can see last time the price found support in the support area before $ 109 i downtrends the resistance was interrupted and the price of Litecoin returned to $ 182. We are now witnessing a similar situation .
By zooming in on the 4 hour chart I labeled the current wave dating back to 6 May.
As you can see I labeled the wave as an impulse followed by a correction. As the Z wave ended on the down resistance line, a further disadvantage was expected compared to current support levels. Following the Elliott Wave principle, we assume that after a small WXYXZ correction, another wave of pulses to the negative side has ended.
Zoom in ahead of the hourly chart I examined the wave structure after the last minor correction and it does seem to be an impulsive wave down, but to a lesser extent.
As you can see the current structure is a structure of corrective waves 4 that I have labeled as ABC for now and wave C seems close to completion, however, I have also labeled the horizontal level at which the 4 wave price and the impulsive wave count would still be valid ie at $ 72.342 where the end of wave 2 is found. This is highly unlikely, although possible and would result in a trap for the bulls, so awareness is the key.
What is more likely is that the down resistance line holds for now as the wave of the impulse ends on the 5 wave target at least $ 49 forming a double bottom, or going to a minimum lower to $ 44 than I think is more likely or even less than about $ 37.
After this pulse ends I expect a breakout from the bearish resistance line, but much like the last time, it happened that this breakout would only be a bullish corrective wave giving sellers a better price before another downside.
Looking closer at the correction we see that I labeled three corrections with three consecutive WXYs as a triple.
So my conclusion would be that we will see some other sideways movement before another minimum of at least $ 49 before an upward breakout.
