Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
LTC/BTC has been trending down for a few days, as I had predicted in my analysis earlier this week:
Let’s take a look at today’s H4 chart on LTC/USD (click to expand)
Huobi DM Launches Real-Time Settlement for BTC FuturesGo to article >>
I’ve drawn the Fibonacci study from this week’s high at 0.002646, until today’s low at 0.002412.
What jumps out from the chart is how, during the bearish trend, the Awesome Oscillator was absolutely uninterrupted, thus proving what a strong trend this has been. And even though the Stochastics had been following suit in a similar smooth fashion, they are now in oversold territory. More pertinently, not only are the oversold, but they have now crossed over and appear to be heading in the opposite direction. In addition, we have the Accelerator Oscillator turning green during this current H4 candle, so it’s tempting to think this could be a sign of reversal.
It’s even more tempting when you look at the previous candle’s price action. At one stage, price was way below the lower Bollinger band, hence we have a candle that has a very long lower wick (circled in blue).
Unsurprisingly, price has just hit the 23.6% Fib retracement level at 0.0246 (circled in white).
Therefore, given the technicals I’ve just mentioned, I hold that price will continue to rise for the rest of the day, until it hits the 38.2% Fib level (circled in red), at 0.025. Having said that, given the strength of the bears we’ve had over the past 48 hours, it’s hard to see this turning into a full blown reversal.