Reduction Rally Forward? Litecoin Seems Oversold Beneath $100 (News)

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Litecoin hit recent 2018 lows within the Asian hours, however could possibly be in for corrective rally courtesy of oversold circumstances.

The cryptocurrency fell to $93 at xx UTC, the bottom degree since Dec. 8, and is at present buying and selling at at $95.80 on Bitfinex, down 9 p.c within the final 24 hours.

The 48 p.c drop from the Might excessive of $182 has turned the tide in favor of the bears. Nevertheless, the sell-off appears overdone because the day by day relative power index (RSI) has nosedived into oversold territory (beneath 30.00) for the primary time in over two months.

Therefore, LTC might revisit $100 (main psychological hurdle) within the short-run earlier than resuming the drop in direction of $80.

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Every day chart: RSI

Presently, the RSI is hovering at 26.00, indicating oversold circumstances. So, the sell-off might run out of steam within the subsequent 48 hours or so.

LTC/BTC Shorts

Curiously, LTC is wanting oversold at a time when quick positions on Bitfinex change are on the highest degree since Oct. 12.

Normally, such excessive market positioning is taken into account an indication {that a} pattern is nearing exhaustion. So, a brief squeeze could possibly be within the offing and will carry costs above $100.00.

That stated, the broader outlook would nonetheless stay bearish as indicated by a pennant breakdown within the long-duration charts beneath.

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Weekly chart


LTC closed at $102 final week, signaling a draw back break of the pennant – a bearish continuation sample indicating that the sell-off from the file excessive of$370 has resumed. So, within the long-run LTC will doubtless check $80.12 (78.6 p.c Fibonacci retracement of the rally from 2015’s low to 2017’s excessive).

Every day chart: Transferring averages

As of writing, LTC is buying and selling nicely beneath the 50-day shifting common (MA), 100-day MA and 200-day MA,  indicating a long-run bearish setup. Additionally, corrective rallies will doubtless be short-lived so long as the 5-day and 10-day MAs are trending south in favor of the bears.

View

  • The short-term oversold circumstances might pave means for a minor corrective rally to $100 (psychological hurdle) and presumably to $106.
  • The long-run outlook stays bearish, so LTC will doubtless check $80 (78.6 p.c Fibonacci retracement of the rally from 2015 low to 2017 excessive) over the subsequent few weeks.
  • Solely a weekly shut on Sunday (as per UTC) above $120 (pennant flooring now appearing as resistance) would abort the long-term bearish view.
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Litecoin picture through Shutterstock

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