Litecoin has stalled on the charts after reaching an 11-week high of $191.8. As price oscillated between their upper and lower trendlines, a horizontal channel emerged. From here, a breakout in either way was possible, but sellers had the upper hand.
To withstand the selling pressure, LTC would need to maintain its defense of the lower trendline. This might spark a new wave of buying pressure, assisting with a retest of LTC’s 200-SMA (green). LTC was trading at $170.2 at the time of writing, with a market size of $11.59 billion.
LTC Chart for the Day
A closer examination of the daily chart revealed that sellers have tested the lower trendline more frequently than buyers have tested the upper trendline. Buyers have not found the strength to climb above the pattern’s half-line in the last few days, resulting in constant drawdowns.
As a result, sellers appeared to be more likely to initiate a break from the pattern. A decisive close below the lower trendline and the $160 level would put the market in danger of losing another 11% of its value. Another note was placed around $146, from which the market could continue to bleed.
Buyers would need to respond fast at the lower trendline and aim for a close above the 20-SMA to regain market control (red). From there, a rise towards the upper trendline is likely. LTC, on the other hand, needs to break through its 200-day simple moving average in order to exert any kind of bullish supremacy.
The RSI appears to have fought back. Buyers have kept the RSI from falling below 50 and entering bearish territory. The Awesome Oscillator remained above its half-line as well. The AO, on the other hand, formed a bearish twin peak setup, which provides a base for sellers to act on. In the meantime, sellers have made gains on the Directional Movement Index. The -DI has gradually approached the +DI, indicating a bearish crossover. Such a signal frequently causes some selling in the market.
LTC had an uphill battle to avoid a horizontal channel breakdown, with an 11 percent drop looming. The RSI, on the other hand, had yet to slip into negative territory, and a green candle indicated purchasing tenacity. It is critical to keep a close eye on how LTC evolves in the following days. A break above the 20-SMA (red) could be the catalyst needed to retest the 200-SMA.