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 H4 chart here.
On the H4 chart we have a good uptrend line that has formed and the price which was respecting this dynamic support so far has currently broken and is holding below it, we may consider this as evidence of bearish pressure. Also, we should note that the price which was creating series of higher highs, higher lows structure so far in recent times has created lower lows for the first time which we may consider as another sign favoring the bears. 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 a value over 25 which we may consider as another evidence of bearish pressure. Also, currently there are no signs opposing this bearish view. So everything looks good here for the bears and we may now move down to lower timeframe and look for evidence supporting this short-term bearish view.
On the the H1 chart, we could see that the price which is moving higher has created a bearish divergence between the first high that has formed at 101.95 and the second high that has formed at 103.22 based on the MACD indicator, followed by a strong bearish move which we may consider as evidence of bearish pressure. Also, based on the Heikin Ashi candles we can see that currently, we have strong bearish bodies in downward moving market conditions so it basically reflects a bearish environment. In addition to this, the ADX indicator gave a bearish signal here as well 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. Currently, it looks like a correction is happening. Also, we had two strong support zones that have formed, the price moved lower broke 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. So the bottom line here is that the H1 chart has evidences supporting the bearish view. Until the 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.
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 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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