Litecoin has formed higher lows and higher highs to trend inside an ascending channel on its 4-hour time frame. Price is currently hitting resistance and might be due for a pullback to support before resuming the climb.
Applying the Fibonacci retracement tool on the latest swing low and high shows that the 61.8% level is closest to support around $36. This also lines up with the 100 SMA dynamic inflection point.
This shorter-term moving average is above the longer-term 200 SMA to confirm that the path of least resistance is to the upside. In other words, the uptrend is more likely to resume than to reverse. The gap between the moving averages is widening to reflect stronger bullish momentum as well.
A shallow pullback could find support at the 38.2% Fib at the mid-channel area of interest around $38. A larger dip could test the 50% Fib at $37. RSI is just making its way down from the oversold region to suggest that sellers are about to return.
Stochastic is also on the move down to confirm that bearish momentum is returning. Both oscillators have a lot of ground to cover before hitting the oversold region, which means that sellers could stay in control for much longer.
Litecoin has been faring slightly better than most of its peers over the past couple of days, possibly due to a strong break above the neckline of a longer-term reversal pattern. Some say that the action was partly supported by a tweet from litecoin founder Charlie Lee:
“They think all other coins are scams and will go to zero. Maximalists think Bitcoin is and will remain the dominant cryptocurrency but there is room for altcoins to exist and even do well.”
Still, there’s no denying that the mood in the industry has been mostly positive so far this year and actual developments in the space could provide the boost it needs to trend higher.