Hi Traders! Litecoin technical analysis and forecast 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! This analysis will be based on price action trading (if you want to learn about price action trading, you can watch this video here).
On the daily chart, we have a bullish rally and currently, it looks like this bullish rally is about to continue itself as there are no signs that show this bullish trend is over yet. So until we get any opposite signs my view remains bullish here. The last divergence we had here is a bullish hidden divergence that had formed between the first low that has formed on 11th January 2021 and the second low that has formed on 28th February 2021 based on the histogram of the MACD indicator. So everything looks good here for the bulls and we may now move down to lower timeframes and see if we can find evidences supporting this bullish view.
Looking at the H4 chart we could see that the daily chart pullback has happened in the form of double wave down with the price creating a bullish divergence between the first low that has formed on 23rd February 2021 and the second low that has formed on 28th February 2021 based on the MACD indicator, which we may consider as evidence of bullish pressure. Also, the price which is moving higher has broken above the most recent downtrend line which we may consider as another evidence of bullish pressure. We may now move down to one more timeframe lower and see if we can find evidence supporting this bullish view.
(Note: You can learn about a Killer Forex Strategy “Double Trend Line Principle” here)
On the H1 chart, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows which we may consider as evidence of bullish pressure. Generally, after a bullish trend pattern we may expect corrections and then further continuation higher. We also had a strong resistance zone that had formed which the price has broken above and currently, this strong resistance zone is acting as a strong support zone for us. So based on all this, my view is bullish here and I expect the price to move higher further from the current zone. Alternatively, if the price moves lower then the next area to look for bullish setups with bullish evidences would be the strong support zone (marked in blue) shown in the image below.
Litecoin D1(Daily) Chart Analysis
Litecoin H4 (4 Hours) Chart Analysis
Litecoin H1 (1 Hour) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this 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.
You will also find a pretty extensive database of educational materials here in the blog – just use the search or check out the Forex Education section above.
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If you have any further questions, don’t hesitate to drop a comment below!
To your success,
Vladimir Ribakov
Certified Financial Technician
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