Litecoin / USD Technical Analysis: Bearish Double Top
A short term bearish bias is weighing on the pair, though the overall trend remains bullish.
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- Litecoin remains bullish in the short-term while price trades above the pair’s 200-period moving average on the four-hour time frame
- The four-hour time frame is showing a bearish double-top pattern weighing on the LTC / USD pair
- The daily time frame shows that the recent rally has created an even larger bullish inverted head and shoulders pattern
Litecoin / USD Short-term price analysis
Litecoin remains bullish over the short-term, with price still trading above the LTC / USD pair’s 200-period moving average on the four-hour time frame.
The four-hour time frame is showing that buyers were unable to move price above the $100.00 level earlier this week, which has created a bearish double-top pattern formation.
Key technical support to the downside is currently located at the LTC / USD pair’s 200-period moving average, at $66.00, and the $61.50 level.
LTC / USD H4 Chart (Source: TradingView)
Pattern Watch
Traders should note that double-top pattern formations are typically bearish reversals patterns.
Relative Strength Index
The Relative Strength Index has turned bearish on the four-hour time frame and is showing that selling pressure is increasing.
MACD Indicator
The MACD indicator has turned bearish, with the MACD signal line and the MACD histogram turning lower.
Litecoin / USD Medium-term price analysis
Litecoin remains bullish over the medium-term while trading above its trend-defining 200-day moving average, which is currently located at the $46.00 level.
The daily time frame shows an even larger inverted head and shoulders pattern has now formed, with price retracing back to the neckline of the smaller inverted head and shoulders pattern.
The smaller inverted head and shoulders pattern on the daily time frame has yet to reach its target of $120.00. The larger inverted head and shoulders pattern has a larger upside objective that would take the LTC / USD pair close to the $160.00 level.
LTC / USD Daily Chart (Source: TradingView)
Pattern Watch
Traders should note that neckline support from the smaller inverted head and shoulders pattern on the daily time frame is located at the $62.00 level.
Relative Strength Index
The Relative Strength indicator is turning bearish on the daily time frame as selling pressures start to intensify.
MACD Indicator
The MACD indicator is also coming under pressure on the daily time frame and shows scope for further downside.
Conclusion
Litecoin is starting to come under downside pressure in the near-term as the bearish double-top pattern on the four-hour time frame increases technical selling.
Overall, the medium-term bullish bias surrounding the LTC / USD pair will remain intact while price trades above its 200-day moving average and the bullish patterns on the daily time frame remain valid.
For a quick look into the Litecoin project, check out our coin guide.
We also published a deep review of LTC and its investment grade here.
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