Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
Litecoin vs Bitcoin has dropped heavily today, and there was one powerful bear candle which gave us a strong signals for the sell.
Let’s take a closer look at the LTC/BTC hourly chart (click below to expand):
NewsBTC to Make Splash at London Summit 2018Go to article >>
I’ve performed the Fibonacci study from the last major swing low on the 14th of March at 0.0263 to the high of this month (today), at 0.0338.
Check out the candlestick around which I’ve drawn an orange ellipse. This is a very important candle for a number of reasons. Firstly, look at how price, on this candle, surged beyond the upper Bollinger line, before coming back down, producing a very long upper wick. Its upper wick is the longest upper wick on any candle on LTC/BTC since the past few hundred candles. This on its own is very significant. At the same time, the Stochastic Oscillator was headed downwards, well above the oversold territory. Price then continued to shoot down on the next candle. Remember, the fact that we’ve had a massive upper wick on the previous candle (marked in orange) tells us that price was already on the way down, and fast. So the next few candles are simply a continuation of that trend. Indeed, on the next candle, we had further corroborating technicals, with both the Accelerator Oscillator and Awesome Oscillator turning red.
Hence, price continued to fall for the next couple of hours until hitting the 61.8% Fibonacci retracement level, where it’s currently residing.
However, with the Stochastics now in an oversold zone, and the Accelerator Oscillator turning green, we’re likely to see some consolidation before another push.
Learn more at http://www.forexreversal.com