Hi Traders! Litecoin short term forecast follow up and update is here. On March 9th I shared this “Litecoin Short Term Forecast And Technical Analysis” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H1 chart, we had a bullish divergence that has formed between the first low that has formed at 98.06 and the second low that has formed at 96.16 based on the MACD indicator. Then the price moved higher and broke above the last high at 103.78 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Currently it looks like a correction is happening. In addition to this, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as yet another evidence of bullish pressure. Until the strong support zone (marked in blue) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further after pullbacks.
Litecoin H1 (1 Hour) Chart Current Scenario
On the H1 chart, based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further after pullbacks. After the bullish convergence, the pullback that I was looking for happened with the price nearing the strong support zone and bounced higher further. Also, in addition to this, there were no signs opposing this short term bullish view. The price then moved higher further as I expected it to and delivered a nice move to the upside as you can see in the image below.
On the H1 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low that has formed on 10th March 2022 and the second low that has formed on 11th March 2022 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided a nice move to the upside so far.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
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If you have any further questions, don’t hesitate to drop a comment below!
Happy Trading!
Arvinth Akash
Traders Academy Club Team.
