Despite this bearish outlook on the daily timeframe for LTC, shorter-term indicators are giving more bullish signals. This is due to the bullish pattern and the convergence of support levels just below the current price level.
So far, this has been explained by a bullish pattern and the convergence of support levels just below the current price level.
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Litecoin exchange rate has canceled the bullish breakout
According to technical analysis of the daily chart, the price of LTC has started to decline after reaching a high of $115 on July 3. This pushed the price back below the $100 horizontal area, which was then confirmed as resistance (red icon). Therefore, the previous bullish breakout above this area is now considered just an outlier (green circle).
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The LTC price is currently trading around $91, approaching the $80 uptrend support line.
Source: TradingView
The daily RSI, meanwhile, is showing a bearish bias. The index is below the 50 mark (red circle) and falling, which indicates a bearish trend and supports the continuation of the decline.
LTC outlook: whether to hope for a reversal
In contrast to the daily chart, the shorter-term four-hour timeframe offers hope for a bullish trend reversal. This is due to the fact that the price is trading inside a descending wedge, which is considered a bullish pattern.
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What’s more, the price is approaching the confluence of the support levels formed by the support line of the wedge and the Fibo level of 0.618.
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Fibonacci levels are traditionally considered to be the most likely springboards for price to stop and reverse after a significant advance in any one direction. They can determine the limits of the price move, with Fibo 0.618 often playing the role of the bottom, if the price decline was only a correction.
So it is possible that this area will be the start of a rebound and subsequent bullish breakout from the wedge.
The RSI, however, is not yet confirming this possibility. The indicator is below the 50 level and has not formed a bullish divergence, which often precedes trend reversals.
Source: TradingView
Despite this bullish short-term outlook, a bearish breakout from the wedge is likely to be the catalyst for LTC price to fall to $80.