Litecoin goes beyond 14 this morning, only to be pegged back with a firm bear tug.
Let’s take a closer look at the current LTC/USD hourly chart below (click to expand):
I asked the question in yesterday’s analysis,
“Will the bulls have enough to break the this latest resistance?”
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Well, the market has unequivocally answered with a loud “YES”.
With great news coming out of China concerning new methods for Bitcoin and Litecoin transactions, price surged to a month high of 14.2, from a low of 9.48 over the weekend, an increase in value of around 50% in just three days.
And it’s with respect to these two points, i.e. 9.48 and 14.23, for which I am performing my Fibonacci study.
Before mentioning Fibs, we need to observe the orange trendline I’ve drawn, where it’s clear how it’s been providing some resistance since the 14th. Remember, this is a four hour chart, so trendlines here can be pretty powerful, and a very powerful leading indicator. Price tested the trendline on four occasions, (circled in yellow), and, on the fourth attempt, simply rocketed down with a super long candle, well beyond the average true range of the previous couple of days. Indeed, the candle reached the 23.6% Fibonacci retracement level at 13.11, which also happened to be the middle Bollinger band, another natural support area if used in conjunction with other technicals.
Right now price has pushed down to the 38.2% Fib, which I expect to hold for a few candles at least, otherwise we’d have price exceed the lower Bollinger, which I wouldn’t expect in light of today’s decent news.