- Cryptos navigate the sea of red as bears embark a gain-trimming exercise.
- Litecoin must defend $110 support for a reversal towards $130.
The cryptocurrency market is in reverse gear after hitting the brake pedal at new 2019 highs. Litecoin is among the worst hit cryptocurrencies with intraday losses of 6% on the day. While May and June were the months of breaking barriers to the upside, July appears to be one where bears take chart. In fact, an analyst recently predicted that Bitcoin will break down further to $6,600.
LTC/USD 1-h chart
The 1-h chart for LTC/USD trading shows how Litecoin made an attempt to make headway above the 61.8% Fib retracement taken between the last swing high at $149.20 to a swing low $107.80. Correction towards $140 lost steam at $137.79 opening the Pandora box. The bearish pressure that took over from here caused a massive reversal in price with 100 Simple Moving Average (SMA) at $123.16 failed to offer support. Litecoin dropped further under $115 and formed a low at $112.48.
The declines towards the end of last explored the levels under $110 forming a low at $107.80. Investors are hoping that the support at $110 will form a double-top pattern which is expected to pave the way for gains above $130. At press time, declines are still imminent with Litecoin exchanging hands at $114.
Technical levels are strongly bearish starting with the Relative Strength Index (RSI) at 37.61 and still in a downtrend after failing to stay above the average level. The Moving Average Convergence Divergence (MACD) 1-h chart is also sending bearish signals with the positive divergence sliding towards the negative.
On the upside, Litecoin will face resistance at the 23.6% Fib level. The second resistance at $120 will pave the way for another correction towards $130.
Litecoin Key Technical Levels
Key Support Areas: $110 and $100.
Critical Resistance: $120 and $130.
MACD 1-h: Negative divergence suggests further breakdown.
RSI 1-h: Sharp downtown means strong bearish momentum.
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