Litecoin adheres to both the technicals on the four hour and the daily timeframe, as I discussed yesterday. It was a bit of a juggling act, but this is why it’s important to ignore different timeframes.
During yesterday’s technical analysis on LTC/USD, I posted the following chart:
Where I mentioned, “Conversely, we have some potentially bullish technicals on the Daily timeframe – so if the bears on H4 do execute what they’re threatening to, i.e. a drop to 61.8%, we may see a swift reversal back to this week’s high. Ultimately, I feel the technicals on the Daily, plus the psychological support of 10.0, may prevent the bears from taking long term control.”
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Thus, if we observe today’s chart, we can see the above prediction has come into fruition (click to expand):
I.e. the bears managed to push price down to the 50% line at 10.25 (although I thought it would test 61.8% at 10.16), before bouncing back towards the high from midweek.
When price behaves in such a manner, almost exactly performing what the trader had calculated, it provides the trader with fuelling confidence in the tried and trusted technicals.
A great end to a great week.