LTC/BTC Technical Analysis – 23rd April 2014

Since the Litecoin vs Bitcoin 's highs reached in late March, we've seen a huge retrace, with price coming back down to as low as 0.0224. In recent days has there been some stability, but we could be on the cusp of further bears.

Let's take a closer look at the latest LTC/BTC chart on the Daily timeframe:

Notice the long bear candle marked in a red ellipse. This has got sell written all over it, for so many reasons. Firstly, its body length is massive, and it is the first huge bear candle ever since the upsurge that began on the 4th of March. Just look how long the actual body is, it's upper wick isn't too shabby either, whilst possessing virtually no lower wick. Reading this candle on its own, without referring to anything else, is a powerful sign that a retrace could be on the way. But of course, we have other factors as well, such as price going way beyond the upper Bollinger, plus the Stochastic Oscillator crossing down from an overbought position. Take a look where this candle closed, right at the 38.2% Fibonacci retracement level at 0.0288, smashing straight through the 23.6% Fib.

Hence, we saw price fall even deeper, all the way to a 78.6% retracement at 0.0235. Ever since testing 78.6%, price has been sticking to the 61.8% at 0.0257, as can be seen on the chart above, marked in red, as ranging took hold. I explained in my previous LTC/BTC analysis that was very likely to happen because of the conflicting technicals, "The latest candle (which is still in formation), has a very bearish look to it, consisting of just an upper wick. The problem is we have the Stochastics in an oversold zone, along with AC and AO as green, so we could have some fluctuating activity for the next few candles before a clearer direction is ascertained."

And a clearer direction may well indeed establish itself, albeit not necessarily a new trend, note the difference. There seems to be a concerted effort to break free from 61.8%, as the Stochastics are now on their way down along with the AC turning red. I wouldn't be surprised to see price hit 78.6% at 0.0235 later this week.