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For the first time since the 19 May crypto meltdown, a powerful bullish response at a key support zone propelled Litecoin over its 38.2 percent Fibonacci level. Due to the overbought character of the RSI, a market drop was predicted before setting its eyes on the 50 percent and 61.8 percent Fibonacci levels.
On the 4-hour timeframe, there are a few regions that could prompt a selling response. LTC was trading at $219.8 at the time of writing, up 15% in the last 24 hours.
LTC 4-hour Chart
Litecoin’s close above $190 was underpinned by high volumes, as the alt easily surpassed $200 and $210. In reality, volumes in the last 24 hours totalled $5.9 billion, surpassing ADA and XRP. The next major goal was now at the 61.8 percent Fibonacci level near $300. However, another 30% surge before a healthy retracement looked doubtful.
The 38.2 percent Fibonacci level and the resistance zone between $233 and $245 were areas that could cause selling pressure. In the event of a retracement, the coin would be found at the freshly flipped support levels of $200 and $210. Furthermore, a stronger selling reaction might reintroduce $190 into the picture.
The RSI entered overbought territory and traded at levels last seen in early January, when LTC hit a multi-year high of $188. In fact, the market dropped by 40% in the days that followed. However, BTC’s retracement in January had a significant effect at the time.
With the king currency now aiming for a move above $50,000, such a strong reaction from sellers appeared unlikely. The Awesome Oscillator reached multi-month highs as well. When LTC prices do correct, keep a close eye on this indicator. A lower high would result in a bearish twin peak formation.
Finally, the rise in LTC was aided by solid capital inflows. The Chaikin Money Flow was at its highest since May 26.
The irregular 36 percent increase in just four days was projected to level off between $233 and $245. Moving forwards, finding support over $200 will help LTC to resume its northern trend. A move towards $190, on the other hand, may be risky. Meanwhile, risk-averse traders can put their take-profits between the previously indicated resistance and long LTC at some key support levels.