Hi Traders! Litecoin short term forecast and technical analysis is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
Litecoin H4 (4 Hours) Chart Analysis – Key Resistance Zone, Bearish Divergence, Lower Lows, ADX Indicator
On the H4 chart, the price which was moving higher has reached a key resistance zone formed by the 100% (155.58) Fibonacci expansion level of the first wave, respected it and is bouncing lower from this zone. In addition to this, we have a bearish divergence that has formed between the first high that has formed at 142.13 and the second high that has formed at 153.76 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, the price which is moving lower has created lower lows between the first low that has formed at 143.07 and the second low that has formed at 133.05 based on the MACD indicator which we may consider as another evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here 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. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidences supporting this short term bearish view.
Litecoin H1 (1 Hour) Chart Analysis – Bearish Trend Pattern, ADX Indicator, Strong Resistance Zone
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then further continuation lower. Currently, it looks like a correction is happening. Also, 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, we may consider this as yet another evidence of bearish pressure. Until the strong resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.
Technical Analysis & Forecast Summary
Litecoin H4 (4 Hours) Chart Analysis
- Key Resistance Zone, Bearish Divergence, Lower Lows, ADX Indicator
Litecoin H1 (1 Hour) Chart Analysis
- Bearish Trend Pattern, ADX Indicator, Strong Resistance Zone
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 sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell 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
Traders Academy Club Team
