Litecoin (LTC) Determined To Retest $50 But Not Before Further Downside
Litecoin (LTC) is due for a correction to the upside after a strong fall that followed a break of market structure. As the LTC/USD daily chart shows, Litecoin (LTC) failed to recover despite several attempts. The momentum to the downside was strong and the bears remain in charge as of now. The price attempted to break above the 10 Day EMA but failed. The RSI for LTC/USD has now run into a strong resistance and has room to continue its decline. Litecoin (LTC) will rise again to retest previous market structure at $50 but not before falling further in the days ahead. That being said, further downside at this stage is going to be limited and recovery will be swift. Any short positions with high leverage are thus highly inadvisable at this stage.
There have been opportunities for Litecoin (LTC) to stage a reversal in the past few days. However, that kind of reversal would have been far too easy and straightforward. This is not how reversals take place. At every point of reversal in a market, there has to be a fight between the bulls and bears marked by confusion as to its outcome. During that fight, investors get mixed signals which can be very misleading at times. A lot of times traders see the price getting pulled back after attempting to break out and they take it as a sign of weakness. Selling into that weakness without waiting it out is more often a mistake that most traders make. Some take that as a sign of further downside and go short on margin only to blow up their accounts.
Long candle wicks that we see on the charts just before a trend reversal are only to be taken as a sign of fighting between bulls and bears. It is not to be taken as a sign of weakness or strength because the fight is not over until only one of the two is left standing. That may sometimes mean losing out on ideal entry points but it is well worth it. There is no lack of opportunities in this market. Do not trade as if this is the last opportunity you are going to get. Litecoin (LTC) was here before and it will be here in the future. Litecoin (LTC) has now completed an extensive correction that puts it close to its bottom. The right approach at this point would be to think about maximizing the quantity of Litecoin (LTC) you can buy, not sell.
If we look at the LTC/BTC 1D chart, we can see that Litecoin (LTC) has clearly broken market structure against Bitcoin (BTC). When this happens, the previous support turns into a strong resistance. In other words, Litecoin (LTC) may not be able to break this resistance against Bitcoin (BTC) anytime soon. Now, some might consider it a setback worrying about the losses they have incurred buying at higher prices in the market while others would consider this an opportunity to accumulate for the long term.
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