Lisk / USD Technical Analysis: Unstable Equilibrium
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- Lisk is bearish in the short-term and remains under immediate downside pressure after breaking under a large triangle pattern
- Short-term technical indicators are attempting to correct higher
- Medium-term outlook for Lisk is bearish with daily indicators showing scope for further losses
Lisk / USD Short-term price analysis
In the short-term, Lisk is bearish after recently falling under a well-defined descending triangle pattern on the four-hour time frame. Furthermore, the LSK / USD pair briefly traded below the December 15th trading low last week, further highlighting the bearish nature of the cryptocurrency.
In the near-term, price is trading within a smaller triangle pattern, with short-term technical indicators turning higher across the four-hour time frame. A technical re-test of the recently broken descending triangle pattern cannot be ruled out in the near-term.
Pattern Watch
Aside from the previously mentioned triangle patterns, traders should watch for further breaks under the December 15th trading low as it will likely signal further downside in the LSK / USD pair.
LSK / USD H4 Chart (Source: TradingView)
Key Moving Averages
The LSK / USD pair has recovered above its 50-period moving average on the mentioned time frame; this is indicating that bullish momentum is gathering pace.
Stochastic + MACD
The Stochastic indicator on the four-hour time frame is starting to correct higher and has some distance before it moves into overbought territory, while the MACD indicator is inconclusive at present.
Lisk / USD Medium-term price analysis
In the medium-term, Lisk is overwhelmingly bearish and risks further extended losses below its current 2019 trading low. Technical indicators on the daily time frame remain neutral, indicating that a long-term price floor may not yet be established in the LSK / USD pair.
A failed inverted head and shoulders pattern is starting to emerge across the daily time frame. If the LSK / USD pair starts to perform daily price closes below the December 15th trading low, a further decline equal to fifty per cent of Lisk’s current market capitalization could occur over the medium-term.
Pattern Watch
Medium-term traders should watch for a break below the December 15th trading low as a confirmation signal that selling pressure is building.
Any sustained moves above the upper trendline on the daily time frame are likely to signal that bearish momentum is starting to subside.
LSK / USD Daily Chart (Source: TradingView)
MACD + RSI
Both the MACD and Relative Strength Index are at neutral levels, which is a helpful indication that the LSK / USD pair has yet to reach extreme oversold conditions.
Moving Averages
LSK / USD has remained under its 50-day moving average since September, highlighting the scale of the bear trend and that overall buying demand remains extremely weak.
Conclusion
Lisk is bearish in the short and medium-term and almost certainly at risk of further substantial losses if sellers start to gain control of the pair below the December 15th trading low.
A near-term up move may occur, although it is likely to provide another opportunity for traders that are looking to short the LSK / USD pair in-line with the prevailing trend.
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