Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
After a steady rise on LTC/BTC in the early hours, came a short but swift drop, not unfamiliar to certain technicals.
Let’s take a look at today’s hourly chart on the LTC/BTC (click to expand).
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We can see how price reached a high of 0.02646 at 6am GMT. This candle (marked with a blue arrow), needs to be looked at in more detail. Firstly, look at how high price reached in relation to the upper Bollinger band, and secondly, the candlestick’s actual upper wick is exceedingly large, almost twice as long as the candle’s body itself. This is a classic bearish candlestick pattern, which should not be ignored. Bear in mind, it’s important to look for other clues for corroboration of a trend initiation.
Hence, we can look at further indicators. And at the close of that very candle, the Stochastics (10,6,6) had crossed over, bearing down, whilst being undersold, and both the Accelerator Oscillator and Awesome Oscillator had turned red. Subsequently, price dropped for a short few hours, crossing below the lower Bollinger line, and hitting a low of 0.02525, at around the 61.8% Fib retracement level.
Right now, price is hovering around the 50% Fib level, and this area could be a magnet for the next few hours.