Hi Traders! Litecoin short term forecast update and follow up is here. On April 30th, 2024 I shared this “Litecoin Short Term Forecast And Technical Analysis” 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
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.
In Litecoin, on the H4 chart, based on the above mentioned analysis my short term view was bearish and I was expecting the price to move lower further after pullbacks until the two strong resistance zones hold. The price action followed my analysis exactly as I expected it to here. After the lower lows, the pullback that I was looking for happened with the price reaching the first strong resistance zone, respected it and moved lower from this zone. The price then moved lower further as I expected it to and delivered a fantastic move to downside!
On the H4 chart, the market provided us with facts supporting the bearish view. The price which was moving inside a triangle pattern, broke below the bottom of it. We may consider this as fact provided by the market supporting the bearish view and also there we no signs opposing this bearish view. Then as you can see in the image below how the price moved lower further and provided a fantastic move to the downside!
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 bearish 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 at 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.
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