Hi Traders! Litecoin short term forecast update and follow up is here. On April 20th 2023 I shared this “Litecoin Technical Analysis And Short Term Forecast” 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 Home Trader Club. Spoiler alert – free memberships are available!
My Idea
On the the H1 chart, we could see that the price which is moving higher has created a bearish divergence between the first high that has formed at 101.95 and the second high that has formed at 103.22 based on the MACD indicator, followed by a strong bearish move which we may consider as evidence of bearish pressure. Also, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. Currently, it looks like a correction is happening. Also, we had two strong support zones that have formed, the price moved lower broke below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. So the bottom line here is that the H1 chart has evidences supporting the bearish view. Until the two strong resistance zones (marked in red) shown in the image below hold my short-term view remains bearish here and I expect the price to move lower further.
Litecoin H1(1 Hour) Chart Current Scenario
On the H1 chart, based on my technical analysis, I mentioned that “Until the two strong resistance zones (marked in red) shown in the image below hold my short-term view remains bearish here and I expect the price to move lower further”. The price action followed my analysis exactly as I expected it to here. We had a pullback with the price reaching the first strong resistance zone, respected it and then the price provided a first move to the downside. We then had another pullback, with the price reaching the first strong resistance zone again. The price respected this zone and then provided a second move to the downside and delivered an excellent move as you can see in the image below!
On the H1 chart, the market provided us with various facts supporting the bearish view. The price, which was moving higher, created a bearish divergence between the first high, formed at 91.64 and the second high, formed at 93.83 based on the MACD indicator. The price then moved lower and broke below the most recent uptrend line. We may consider these as facts provided by the market supporting the bearish view, and also there were no signs opposing this bearish view. Then as you can see in the image below, how the price moved lower further after that and provided an excellent move to the downside!
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here, and there were no signs against it. When the facts do happen as we expected, you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us with the majority of the time, it’s our obligation as traders to be able to listen to these things that the market tells us, and we should try to make the right actions accordingly.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
