Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
From a longer timeframe perspective, Litecoin vs Bitcoin is in the middle of a Bollinger Squeeze, particularly since Friday, as can be seen below on the H4 timeframe (marked in white)…
But zooming into the hourly timeframe, we can still see some classic technicals at play within this very squeeze. So let’s take a closer look at the LTC/BTC chart below (click to expand):
FXTM Appoints Marcelo Spina as Global Head of PartnershipsGo to article >>
For this chart, I have performed the Fibonacci study from yesterday’s low at 0.0248 until today’s high at 0.0259.
Concerning the candle that produced that high of 0.0259 (circled in red), then we can see how it’s upper wick is as long as the actual body, well surpassing the upper Bollinger band. At the same time, the Accelerator Oscillator had just red, alerting us to a possible retrace. And over the next couple of candles, other technicals confirmed the retrace, by way of the Stochastics crossing downwards and the Awesome also turning red.
Hence price came down to the 38.2% Fib retracement level, at 0.0255, where it’s been tested, on no less than four occasions, marked in blue.
I would expect price to continue to bounce between today’s high and the 38.2% for the next few hours, purely because I just don’t see valid technicals to indicate any break out just yet.