LTCUSD Technical Analysis for 07/04/2018 – Bullish Correction Taking Place
LTCUSD recently busted through the top of a short-term range to start an uptrend on its 1-hour chart. Price is now trading inside an ascending channel and looks prime for a correction to the bottom.
The Fibonacci retracement tool shows that this lines up with the 61.8% level to add to its strength as a floor. The 100 SMA also lines up with the area of interest around $82.50, which might be enough to keep losses in check.
If so, a bounce back to the swing high at $90.17 or the channel top closer to $92 could be in the cards. A break below the channel bottom could still find support at the 200 SMA dynamic inflection point around $80.
The 100 SMA is above the longer-term 200 SMA to signal that the path of least resistance is to the upside. This indicates that the uptrend is more likely to resume than to reverse.
RSI has some room to head lower before hitting oversold conditions, though, so the correction could go on for a bit longer. Stochastic is already dipping into oversold territory to signal weaker bearish pressure and turning higher could draw buyers back in.
LTCUSD and other cryptocurrencies are off to a good start so far this Q3 but it remains to be seen if this sentiment could be sustained. Some attribute the gains to profit-taking from earlier declines or a mere dead cat bounce, but others believe that the lack of negative headlines suggest that the industry is turning a corner.
Meanwhile, the dollar is on slightly weaker footing due to trade tensions and the upcoming catalysts such as FOMC minutes and NFP release could make or break tightening expectations. For now, cryptocurrencies like litecoin are also taking advantage of declines in traditional assets like stocks or commodities to gain from risk-on flows.
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