- Litecoin formed a deadly weekly evening star formation, indicating a significant reversal.
- LTC/USD has lost over 20% within the last week, as the bears regain control.
LTC/USD: Recent Price Behaviour
Litecoin has fallen victim to some harsh selling of late, losing bullish momentum that was seen over a week ago. The price is on a losing streak, running at its second consecutive session in the red.
LTC/USD has been forced to drop a chunky 20% since 13 February, when bulls handed over the controls back to the bears. Litecoin was trading up at heights of $84, at the highest levels seen since August 2019. It has now been forced to the lowest level in some two weeks, with the change in market sentiment.
The bias was largely in favour of the buyers from the get-go of 2020. Litecoin started the year down at $38, going on to consecutively rally for around seven weeks, gaining a whopping 110% before this recent change in direction. It was the best run higher that had been observed since April – May 2019. In terms of the current pullback, Litecoin has not seen consecutive weekly losses since mid-December 2019.
Weekly Chart View
The weekly candlestick last week closed with a negative signal; producing an evening star formation. Typically, these are indications of an imminent trend change, which has very much been the case so far. A confirmation of the downside bias would be another negative closure, with the price of this current week closing below the prior. Last week it closed at $75, with the price at the time of writing very much south of this.
Daily Chart View
Price action via the daily chart is testing a critical ascending trend line of support. It has been in play since 3 January, guiding LTC north with this current run higher. However, given the pace of downside momentum, a potential breach of this support cannot be ruled out. It can be seen tracking at around $68, with LTC/USD hugging very closely to this at the time of writing.
As noted in the previous article, a buy position could have been attractive if the daily support at $73.00 held; however, the bears forced a breach. A position for shorts are now superior, with points of entry eyed upon a breakout and retest of the noted trend line. Once this plays out, targets to the south will be; $60, $53 and then $50. Stops to be placed at $73.50. The position would only be attractive upon a noted daily breakout and closure below the trend line.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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