Yesterday the question was asked concerning Litecoin – can the bears be stopped? Well, it seems like the support zones I talked about over the weekend have come to fruition…
Let’s take a closer look at the LTC/USD chart on the Daily timeframe:
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Like yesterday, I’ve performed the Fibonacci study from the low of this year at 10.7, until the high of this month, at 21.1.
I talked about two support lines amalgamating, specifically the 78.6% Fib level, and the 13.00 psychological round number. In fact, what occurred yesterday, is occurring again today, so essentially what I explained yesterday remains true today. Hence, I’ll repeat those words:
“Indeed, as I write this analysis, Litecoin is again hovering around the 78.6% Fib level, and this, along with the fact 78.6% coincides with the price mark of 13.00, an important psychological whole number; is providing some support for the meantime. We also have the Stochastics in oversold territory, which may turn around in the next few candles.”
There is one difference however, which may give the edge to the bears. And that is the price action of the current candle. Look at the upper wick of the latest candle – extremely long, and there’s virtually no lower wick to speak of. This price action looks extremely bearish, and was it not for the confluence of aforementioned two support lines, I’d be very confident of a further drop today, with both the Accelerator Oscillator and Awesome Oscillator closing as red for a number of bars now.