Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.
After a period of choppiness yesterday, LTC/BTC has broken out.
Take a look at the hourly chart below (click to expand).
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We can see how price was contained within a concise box for a number of hours, with plenty of candles with short body lengths and relatively long wicks, (white rectangle). This is classic consolidation territory. In addition, a combination of factors told us some bulls could be on the move. Firstly, there was a break out from the channel. Secondly, the Accelerator Oscillator and Awesome Oscillator were in agreement, i.e. both had turned green. And thirdly, the Stochastics had crossed upwards whilst being underbought.
Consequently, price rose for a few candles, reaching a high of 0.0256. Then, take a look at that candle, marked with a red arrow. Look at how it opened AND closed above the upper Bollinger line. This is a rare occurrence, but when it happens, it is often followed by an immediate reversal, for at least one candle. Price went down below the 23.6% Fib level and is hovering there abouts as we speak.
Also of current note is the Accelerator Oscillator, in that it’s just turned red this hour. We may see a drop to the 38.2% Fib level very soon.