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 daily chart here.
On the daily chart, we have a bearish divergence that has formed between the first high that has formed at 105.44 and the second high that has formed at 112.51 based on the MACD indicator. The price then moved lower and broke below the last low at 76.71 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently, it looks like a correction is happening and in addition to this, there are no signs opposing this short term bearish view at the moment. 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.
Looking at the H4 chart, we could see that the price which is moving lower has created lower lows based on the MACD indicator, which is a sign of gaining momentum toward the bearish side. 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. Also, we had two strong support zones that has formed and the price which was moving lower has broken 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. Until these 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 after pullbacks.
Litecoin D1(Daily) Chart Analysis
Bearish Convergence, No Opposite Signs
Litecoin H4(4 Hours) Chart Analysis
Lower Lows, ADX Indicator, Two Strong Resistance Zones
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
Home Trader Club Team.
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