Hi Traders! Litecoin short term forecast follow up and update is here. On November 24th 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 Traders Academy Club. Spoiler alert – free memberships are available!
My Idea
On the H4 chart, 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, we could see that the price has created higher highs based on the MACD indicator, which is a sign of gaining momentum toward the bullish side. Also, the ADX indicator gave a bullish signal here as well, at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads a value over 25, we may consider this as yet another evidence of bullish pressure. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout, these strong resistance zones are acting as two strong support zones for us. So based on all this, until both these strong support zones shown in the image below(marked in green) hold my short-term view remains bullish here and I expect the price to move higher further after pullbacks.
Litecoin H4(4 Hours) 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 two strong support zones hold. The price action followed my analysis here exactly as I expected it to. After the higher highs, the pullback that I was looking for happened with the price creating a bullish hidden divergence between the first low formed at 59.11 and the second low formed at 70.56 based on the MACD indicator, which we may consider as a fact provided by the market supporting the bullish view. Most importantly, the price which was moving lower reached the first strong support zone, respected it and then it bounced higher from this zone. The price then moved higher further and delivered a nice move to the upside, until it was blocked by a bearish divergence.
On the M15 chart, the market provided us with various facts supporting the bullish view. The price which was moving lower created a bullish divergence between the first low which formed at 70.64 and the second low that has formed at 70.56 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 a nice move to the upside.
As traders we always have two choices, the first one is to fall in love with our analysis and try to convince the market and expect the price to move in the direction as per our wish. The second one is to follow the facts that the market provides us and make the right actions according to that. As you know the first option won’t help us and as you can see in the example above what happened when we followed the facts that the market hinted to us and took the right action according to that.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team.
