Litecoin hit recent 2018 lows within the Asian hours, however could possibly be in for corrective rally courtesy of oversold situations.
The cryptocurrency fell to $93 at xx UTC, the bottom stage since Dec. eight, and is at present buying and selling at at $95.80 on Bitfinex, down 9 % within the final 24 hours.
The 48 % drop from the Might excessive of $182 has turned the tide in favor of the bears. Nevertheless, the sell-off seems overdone because the day by day relative power index (RSI) has nosedived into oversold territory (under 30.00) for the primary time in over two months.
Therefore, LTC may revisit $100 (main psychological hurdle) within the short-run earlier than resuming the drop in direction of $80.
Every day chart: RSI
Presently, the RSI is hovering at 26.00, indicating oversold situations. So, the sell-off could run out of steam within the subsequent 48 hours or so.
Curiously, LTC is wanting oversold at a time when brief positions on Bitfinex trade are on the highest stage since Oct. 12.
Normally, such excessive market positioning is taken into account an indication development is nearing exhaustion. So, a brief squeeze could possibly be within the offing and will carry costs above $100.00.
That mentioned, the broader outlook would nonetheless stay bearish as indicated by a pennant breakdown within the long-duration charts under.
LTC closed at $102 final week, signaling a draw back break of the pennant – a bearish continuation sample indicating that the sell-off from the document excessive of$370 has resumed. So, within the long-run LTC will seemingly check $80.12 (78.6 % Fibonacci retracement of the rally from 2015’s low to 2017’s excessive).
Every day chart: Shifting averages
As of writing, LTC is buying and selling properly under the 50-day transferring common (MA), 100-day MA and 200-day MA, indicating a long-run bearish setup. Additionally, corrective rallies will seemingly be short-lived so long as the 5-day and 10-day MAs are trending south in favor of the bears.
- The short-term oversold situations may pave means for a minor corrective rally to $100 (psychological hurdle) and presumably to $106.
- The long-run outlook stays bearish, so LTC will seemingly check $80 (78.6 % Fibonacci retracement of the rally from 2015 low to 2017 excessive) over the following few weeks.
- Solely a weekly shut on Sunday (as per UTC) above $120 (pennant flooring now appearing as resistance) would abort the long-term bearish view.
Litecoin picture by way of Shutterstock
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