Litecoin’s fall from grace yesterday was ironically, rather gracious… if you weren’t long LTC/USD that is, since it was an almost perfect test of a key Fibonacci level.
Firstly, looking at Litecoin vs US Dollar from a longer term view, on the Weekly timeframe, I’ve performed the Fibonacci study from basically the all time low, until the all time high. It’s essential to keep in mind key support/resistance points of higher timeframes, especially when rapid moves like yesterday’s occur, since, even though the moves can be sudden, their breaks can be just as sudden. This latest move was a case in point:
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So, observing the Weekly chart above (click to expand), we can see how price fell down to and tested the 78.6% Fib level (circled in blue). Indeed, it’s actually been tested before, in late February this year, so this makes it an even more vital zone that needs to be paid attention to. Unsurprisingly, there was a bounce off this level…
Then, zooming into the four hour timeframe below:
We can see how this bounce has now retraced back up to the 23.6% Fib level at 11.1. In addition, with the Accelerator Oscillator and Awesome Oscillator now green, and the Stochastics crossing up from an oversold position, I expect price to reach the 38.2% Fib level soon, as long as we have one of the imminent candles closing above 23.6%.