Litecoin hit a year low of around 8 last week, but a strong recovery meant yesterday morning price managed to hike up to 11.64. Unfortunately today hasn’t been a good day, and we’ve seen half of that hike wiped out in a matter of hours. Indeed, we’re most probably going to be seeing more losses in the next few hours.
Let’s take a closer look at the LTC/USD chart on the H4 timeframe below (click to expand):
I’ve performed the Fibonacci study from the low of the year at 7.95, to the high since then (yesterday) at 11.64.
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I mentioned in my previous Litecoin analysis,
“I doubt it will be long before price hits 9.0, the question is how long will this support last.”
Well, it didn’t last long as it smashed straight through it, however support held at the next whole number, 8 instead.
Since the rise to 11.6, we’ve seen a drop to the 23.6% Fibonacci retracement level at 10.7, where there’s been some ranging (marked in white), not unexpected since there were some very messy and conflicting indicators on the M30 timeframe. However, after some candles, the technicals came into alignment, whereby the Stochastics were now clearly heading south from an overbought zone, and the Accelerator Oscillator and Awesome Oscillator turned red. Consequently, we’ve seen price break 23.6%, dipping down to 50% at 9.8, before bouncing off 50% to rise above 10.
However, I doubt 50% will be able to hold much longer, since the bears are still rather strong, especially for the short term. Therefore I expect price to reach the 61.8% Fib at 9.3 before long.