Hi Traders! Litecoin technical analysis and short term forecast post is here. We do our analysis on the MetaTrader4 platform (MT4), some very interesting, useful tips and hacks about the MT4 platform could be found here. As we do in every technical analysis post we are going to perform the multi-timeframe technical analysis on Litecoin in order to find possible trading opportunities. If you would like to learn more about the way we trade and the technical analysis we use then check out the HomeTrader Club Spoiler alert – free memberships are available! Let’s start our analysis now from the highest timeframe which will be the H4 chart here.
Litecoin H4(4 Hours) Chart Analysis – Strong Support Zone, Bullish Convergence, ADX Indicator
On the H4 chart, the price which was moving lower reached a strong support zone respected it and bounced higher from this zone. Also, we could see that the price has created a bullish divergence which formed between the first low formed at 89.92 and the second low formed at 88.12 based on the MACD indicator. The price then moved higher and broke above the last high at 94.86 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence, we may consider these as evidence of bullish pressure. 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 a value over 25, we may consider this as yet another evidence of bullish pressure. Also, currently, there are no signs opposing this bullish view. So everything looks good here for the bulls and we may now move down to lower timeframe and see if we can find evidence supporting this short-term bullish view.
Litecoin H1(1 Hour) Chart Analysis – Bullish Divergence, Heikin Ashi Candles, Downtrend Line Breakout
On the H1 chart, we had a bullish divergence that formed between the first low formed on 9th February 2023 and the second low formed on 13th February 2023 based on the MACD indicator which we may consider as evidence of bullish pressure. In addition to this, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. we may consider this as other evidence of bullish pressure. Also, the price has broken above the most recent downtrend line and is currently holding above it, we may consider this as another evidence of bullish pressure. Also, the ADX indicator gave a bullish signal here as well, at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads a value over 25, we may consider this as yet another evidence of bullish pressure. So based on all this, my short-term view remains bullish here and I expect the price to move higher further until the strong support zone (marked in green) shown in the image below holds.
Technical Analysis & Forecast Summary
Litecoin H4(4 Hours) Chart Analysis
- Strong Support Zone, Bullish Convergence, ADX Indicator
Litecoin H1(1 Hour) Chart Analysis
- Bullish Divergence, Heikin Ashi Candles, Downtrend Line Breakout
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Home Trader Club Team
