LTC short-term ambitious traders looking for profits can target $49-$50 range
Disclaimer: The information provided does not constitute financial, investment, trading or other type of advice and represents the opinion of the author only.
Litecoin [LTC] It surged to $66 last week but was brutally rejected above the range high. At the time of writing, the price also fell below the mid-range mark of $53.9. In other news, Litecoin’s hash rate has actually benefited in recent days.
Ethereum [ETH]The move to Proof of Stake (PoS) could have positive effects. On the shorter time frames, this positive impact may not translate into price gains for the next day or two. Coin Glass Data Indicates that the ratio of longs to shorts has been slightly in favor of bears over the past 24 hours.
LTC – 4 hour chart
There is strong technical evidence behind the short positions. Prices were rejected at the range (yellow) high near $65. The mid-range (yellow dotted line) was also crushed by selling pressure.
In late August and early September, the $53 to $52 area witnessed multiple wicks reaching it. This marks the area as an important liquidity pocket where demand has been seen.
However, sellers have dominated the transactions over the past few days. Hence, the bias for the next few days will be bearish. This could change if LTC can reclaim the $53 area as support.
LTC – 1 hour chart
Zooming in to the lower time frame, we can see a one-hour bullish engulfing candle. In the hours after this candle formed, the previous bearish market structure came into play, with a sharp drop below $52.5. The price continued to fall to $50.17.
Therefore, the candle is marked as a bearish order block. In addition, a set of Fibonacci retracement levels (yellow) have been drawn down to $50.17. They show a 78.6% retracement at $52.98.
This level also acts as resistance and LTC continues to decline after retesting the order block. Short positions can be profitable at the $50.17 low, and ambitious traders can even target $49.33.
The formation of a bearish order block and its confluence with the Fibonacci retracement level suggests that another drop to $49 is likely. The entire move also occurred below long-term key support in the mid-$54 range. Hence, the bearish move is likely to continue the next day.