Hi Traders! Litecoin short term forecast update and follow up is here. On June 22nd 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 H4 chart, the price which was moving lower reached a strong support zone, respected it and bounced higher from this zone. In addition to this, we could see that the price which was moving lower created a bullish divergence that has formed between the first low that has formed at 74.06 and the second low that has formed at 71.02 based on the MACD indicator. The price then moved higher and broke above the last high at 79.67 creating higher highs, thus forming a classical setup of bullish divergence followed by bullish convergence. Hence as per the book scenario, after a bullish convergence, we may look for corrections to happen and then further continuation to the upside. Also, 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. 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 value over 25, we may consider this as yet another evidence of bullish pressure. Until the strong support zone (marked in green) shown in the image below holds my short term view remains bullish here and I expect the price to move higher further after pullbacks in the short term.
Litecoin H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis my short-term view was bullish here and I was expecting the price to move higher further until the strong support zone holds. The price action followed my analysis here exactly as I expected it to. After the bullish convergence, the pullback that I was looking for happened and then the price moved higher further as I expected it and delivered an excellent move to the upside as you can see in the image below.
On the H1 chart, the market provided us with various facts supporting the bullish view. After the bullish convergence the price which was moving lower created a bullish hidden divergence between the first low that has formed at 75.69 and the second low that has formed at 81.55 based on the MACD indicator. The price then moved higher and broke above the most recent downtrend line, we may consider these as facts provided by the market supporting the bullish view. Then as you can see in the image below how the price moved higher after that and provided an excellent move to the upside!
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 bullish 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 and 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.
