![Litecoin [LTC] Price Analysis – Identifying the Most Likely Reversal Area, Possible Bear Trap?](http://blokt.com/wp-content/uploads/2018/11/ltc1-300x140.jpg)
2018-11-16 13:54 |
Litecoin was not spared during Wednesday’s sharp drop. Its price fell 14%, from 51 to 44$. Below we are going to offer an analysis of what might happen in the following months.
Litecoin Weekly Chart – Source: TradingView.comA look at the weekly chart shows us that the price has been facing resistance from the 9-day SMA (Simple Moving Average) since the bearish cross (9-day SMA crosses over 26-day SMA) in July 2018. The next area of possible reversal would be the 33-40$ range formed by the support of July 2017. The same area corresponds with the 200-day SMA (white line), which also could offer support to price. Moreover, it is worth keeping an eye on the MACD, as it is losing power, and might set up another bearish cross.
Litecoin Daily Chart – Source: TradingView.comA look at the daily chart offers us a similarly grim view. Litecoin broke out of the descending triangle it had been trading the past 92 days with large volume, and the MACD fell sharply with similar volume. If the price falls the full length of the triangle, it will follow with a drop to the low 30s area, which corresponds with our long-term view.
Litecoin Weekly Logarithmic Scale – Source: TradingView.comFinally, a look at the Weekly logarithmic scale, shows that a drop to the 33-40$ area would correspond with the highs during the 2013 Bull-run, which offer significant support. Thus, a complete study of the indicators and previous price action identifies the 33-40$ as the most likely area for a reversal.
Alternative Scenario: Litecoin Daily Chart (Alternative Scenario) – Source: TradingView.comWhile most indicators point to a sustained drop, it is worth keeping an eye on the alternative scenario, in which this was a bear trap, and Litecoin breaks out of the descending wedge. In that case, the length of the wedge would predict a short-term bull market to the 75-90$ area, which would correspond with the 0.382 fib level of the recent fall, and July-August support.
Key Takeaways:Litecoin fell sharply during the cryptocurrency drop of Nov.14. The next support area is 33$-40$, formed by previous highs + 200-day SMA. A less likely alternative scenario would have us at around 80$ during the end of November.
Litecoin [LTC] Price Analysis – Identifying the Most Likely Reversal Area, Possible Bear Trap? was originally found on [blokt] - Blockchain, Bitcoin & Cryptocurrency News.
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