Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
LTC/BTC shot up late last night/early morning from 0.0207 to 0.0275 yesterday midday.
Looking closer at the four hour chart on LTC/BTC below (click to expand), then we can see where the upsurge was initiated. I have circled in white the key candlestick in question here. This is an important candle, because, whilst being a bullish candle, it closed below the lower Bollinger band. At the same time, the Accelerator Oscillator had turned green, and the Stochastics were underbought and smoothly heading north. On the following candle, the Awesome Oscillator followed suit.
NEXT BLOCK SOFIA 2.0 + Fabulous Blockchain After-PartyGo to article >>
With all these technicals in place, price was ripe for some bullish love, which it duly received. However, there was one major point which could have prevented such a huge move up. For that we need to check out the Daily timeframe:
You can see how strong the downtrend was before the bulls came into play, since we have SEVEN bear candles in a row. Thus, we can see by way of the red trendline, how strong of a resistance that line had provided for the previous few consecutive days. However, such was the momentum of the bulls I’ve just explained above, that price simply shattered right through that trendline, almost as if it wasn’t even there (marked with a blue arrow). And when a break of a trendline as such occurs, whereby price gives virtually no regard to the potential support or resistance in this case, then often we see a strong rally, which is exactly what happened here.
Since that huge move up, price has retraced back down to the 38.2% Fibonacci level at 0.025, where I expect it to meander along for the remainder of the afternoon.