LTCUSD continues to trend lower, moving inside a falling wedge pattern on the 4-hour chart and approaching its peak. This means that a breakout is bound to happen soon, and technical indicators are giving mixed signals on direction so far.
The 100 SMA is below the longer-term 200 SMA to signal that the path of least resistance is to the downside. In other words, the downtrend is more likely to continue than to reverse, which increases the odds of a downside break. The wedge pattern spans $110 to $180 so the resulting drop could be of the same height.
Similarly an upside break could lead to a rally of the same size, but LTCUSD will have to contend with the nearby dynamic inflection points at the moving averages and wedge resistance. RSI is also pointing down to signal that sellers still have enough energy to push for more declines. However, stochastic looks ready to turn higher and is showing a bit of bullish divergence.
The lack of any market-moving catalysts has kept LTCUSD in consolidation, with slight favor for the dollar on account of risk aversion and Fed tightening expectations. The upcoming NFP release could spur a breakout in either direction, depending on whether or not the results support a faster pace of rate hikes.
Analysts are expecting to see a slightly stronger pace of gains in employment for May but the attention would likely be on the average hourly earnings to gauge future inflation.
As for litecoin itself, other industry updates might be enough to spur more moves, particularly when it comes to the smaller altcoins primed for their mainnet launch at the end of the month. If all goes well, this could lead to more liquidation of litecoin holdings as investors rush to the likes of Tron or EOS.
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