Litecoin vs Bitcoin has just produced a double top chart pattern, so any gains experienced over the weekend may come tumbling down over the next day or two.
Let’s take a closer look at the LTC/BTC chart on the H4 timeframe (click to expand):
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I’ve performed the Fibonacci study from the low of the past fortnight at 0.026, to today’s high at 0.028.
I’ve highlighted the double top pattern in red ellipses. Now, take a look at the initial top on the far left. Prior to reversal, there were around eight candles possessing significant upper wicks. It rarely happens where so many consecutive candles share the same upper or lower wick length. This is a strong suggestion that price was about to fall. On its own, it’s not enough, but with further corroborating technicals, it’s absolutely fathomable, as when we had our first bear candle, the Accelerator Oscillator closed as red, whilst the Stochastics had just crossed over, heading downwards from an overbought position.
Price dropped sharply until 2.6, before rising again – to the previous high at 0.028. Since we’ve already had a sharp turn at this point before, then at the very least, without even looking at anything else, it’s vital that since we’re here again, caution be exercised, in terms of appreciating this area could be of noteworthy resistance.
Right now, price has retraced back to the 23.6% Fib level, and with both the Accelerator Oscillator and Awesome Oscillator indicators looking bearish, along with the Stochastics in overbought territory, then we’re likely to see a drop to the 38.2% Fib level at 0.02755 over the next few candles. Whether it can push beyond there is questionable, since 38.2% has already been tested three candles prior, unless we have a candle close below that level, in which case I expect 50% to be hit – which would make this a convincing double top.