Analysis provided by Ashton Fraser, learn more about his Forex Reversals trading strategies.
After reaching a high of 18.76 yesterday, Litecoin drops to a significant level.
Let’s take a look at the hourly chart on LTC/USD (click to expand):
Stay Prepared With VPS from InstaForexGo to article >>
At 3pm GMT yesterday, a very bearish candle had just closed, (circled in red), because if you look at the candle just preceding it, you’ll notice they’re virtually identical, apart from obviously the direction. Similar body lengths, and hardly any wicks. This price pattern can often signify a reversal. Also, at the same time, the Accelerator Oscillator had turned red, plus the Stochastics were in overbought territory.
Price declined in stages over the course of the next eighteen hours. First it hit the 23.6% Fib retracement level at 17.21, price stalled for a couple hours. Then it pushed down to the 38.2% Fib level at 16.26, where again it hovered for a few more hours, before the final push down to 50% at 15.5.
Despite the minor stalls at each of the subsequent Fib levels, price was actually a smooth downwards movement, as the Awesome Oscillator confirms by way of no interruption on its bears (marked with a blue arrow).
Since the touch at 15.5, price has been wandering between 38.2% and 50%. The thing is, the Accelerator Oscillator has now turned green, and with Stochastics in oversold territory, I expect price to re-touch 38.2% later today.