Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
Over the weekend there was a slow but gradual drop on Litecoin, hitting a key support line.
Let’s take a look at the hourly chart on LTC/USD (click to expand):
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I’ve done the Fibonacci study from the low of this year, at 10.686 to the high of the 26th of Feb at 14.88.
I mentioned yesterday price was most likely going to drop further. Indeed it fell all the way till the 61.8% Fib retracement level at 12.3, testing it twice, before sharply rising to the 38.2% Fib level at 13.28.
That sharp rise this morning around 7am GMT was initiated by a lot of bullish technicals coming into play on the same candle. The Stochastics were heading upwards whilst being oversold, and the Accelerator Oscillator and the Awesome Oscillator both turned green on that very same candle. It’s therefore of little surprise the candle is a pretty long candle. As mentioned, price rose until the 38.2% Fib level, which was also actually located at the upper Bollinger line at the time. The bounce down was immediate.
I still feel there is room for some more bulls this afternoon, but with the overall bearish trend being maintained, as the H4 chart below demonstrates, then I’d expect some fluctuation between the aforementioned levels for the remainder of the day.