Analysis provided by Ashton Fraser, learn more about his trading strategies with the forex reversal indicator.
Litecoin hits a support level today, just above the 15 level price mark, with a potential retrace still questionable.
Let’s take a look at the LTC/USD H4 chart below (click to expand):
I’ve performed the Fibonacci study from the high of this month at just above 21 to the low of the last fortnight, at 15.05.
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Now, we can see how the current low has been tested twice before, once on the 8th and once just this last Friday. Price tested this low again this morning, before bouncing up to the middle Bollinger band at 15.5, where it’s currently residing. In fact, the middle Bollinger line has acted as a natural resistance line over the past half a dozen or so candles, so price may struggle to go beyond this point, but, if it does, then I expect a rise to the upper Bollinger line within the next few candles.
However, there seems to be gravity at work here, in the form of a major Fib level on the Daily timeframe (click below to expand):
Specifically the 23.6% Fib level. Look how price hasn’t been able to break free from there over the past few days. Whether the market goes above 23.6% or below 23.6%, it still returns back to that level.
On the higher timeframes such as the Daily / Weekly / Monthly, it’s imperative to observe key support and resistance levels, as they’re crucial in determining how the market will react. Right now we’re seeing this zone as a sticking point, and it’s going to take some strong action to break free from here.
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