The trend on Litecoin can still be considered bullish, however, until the price closes below prior breakout levels.
The Telegram Channel
.
Litecoin bounced off resistance
According to the results of the technical analysis of the weekly chart, the price dynamics and RSI indicator are giving bearish signals.
The price dynamics is bearish as it shows the LTC rate (red circle) deviating above the $100 horizontal area, after which the price reaffirmed this area as resistance again. Such deviation is considered a bearish sign and most often leads to significant downward movements. That’s what happened to the Litecoin exchange rate, which is now trading around $90.
Litecoin is now trading around $90.
The long term uptrending support line, which is over a year old, is currently at $72.
Source: TradingView
In addition, the weekly RSI is also supporting a continued decline. Although this indicator is still above 50, it formed a bearish divergence (green line) during the price deviation. This is a bearish development when price growth is accompanied by fading momentum. This confirms the likelihood that the trend is bearish.
.
LTC forecast: why the bullish breakout failed
On the shorter timeframe, we can see that on July 28, Litecoin price made a bullish breakout from the descending wedge. The wedge is considered a bullish pattern, and a breakout from it should have resulted in significant upside.
The LTC price declined shortly after the breakout, recognizing the wedge’s resistance line at $88 as an upside barrier. Since a long lower wick (green icon) has formed on the chart, it is possible that this is a retest of previous resistance.
The RSI, however, does not confirm this possibility. The indicator has fallen below the 50 mark (red circle) and is moving downward. This is a sign of a bearish trend and is not associated with breakouts of bullish patterns.
They are not associated with breakouts of bullish patterns.
Source: TradingView
Because of these conflicting signals, the outlook for LTC will depend on whether the price falls below the wedge resistance line at $88 or continues to rebound.
If the price falls below this level, it could fall another 9% and reach the $82 horizontal support area. However, if the rebound continues, LTC could rise 13% to reach the $102 resistance area.