After yesterday’s unexpected drop, Litecoin manages to settle down, for the time being at least.
Let’s take a closer look at the LTC/USD chart on H4 (click below to expand):
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I’ve performed the Fibonacci study from the swing high at 17.00, until today’s low at 12.4.
As can be seen, following the sell of, there was actually a pretty large retrace this morning until it closed at the 38.2% Fib level at 14.3 around 5am GMT, circled in red. Price then rose further to the 50% level, before dropping back down to the 23.6% level at 13.46.
Now, take a look at the candle which tested 50%. It has a very long upper wick and a minimal lower wick, a very strong bearish candlestick price action. Subsequently, the next candle closed as a bear candle, but its upper and lower wicks are of equal length, indicating possible indecision. The thing is, we have the Accelerator Oscillator turning green, with the Stochastics crossing upwards, so it is possible price could test 23.6% again before bouncing up to 38.2%.
Right now, price is smack in the middle between 23.6% and 38.2%, I expect it to remain within the confines of these two Fib lines for the next few candles. If price breaks 38.2% at 14.13 however, we could see another rise to 14.6.