Analysis provided by Ashton Fraser, learn more about his trading strategies at Forex Reversal.
Litecoin played out a classic technical move this morning.
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If we take a look at the chart above (click to expand), the first thing we’ll see is the Bollinger Squeeze finally coming to an end this morning, when price broke through the middle Bollinger line (marked with a blue vertical line).
At the same time, we saw how the Stochastics had now turned downwards, whilst both the Accelerator Oscillator and the Awesome Oscillator had actually been red for quite a few candles.
Price continued a strong bearish move for some hours, though there was some minor whipsaw, before eventually hitting a low of 14.45.
Right now, price has bounced up to the 23.6% Fibonacci retracement level. In addition, you’ll see how a couple of candle earlier price closed below the lower Bollinger band. That’s not much on it’s own of course, but given that both the AC and the AO indicators have turned bullish, and Stochastics are getting ready for a reversal (marked with a white vertical line), then I would expect price to surpass the 23.6% Fib level very soon.