It's Time To Exercise Caution, in Litecoin! (LTC)
I'm becoming increasingly concerned with this inverted head and shoulders breakout in Litecoin. You can see that we got above the neckline on above average volume, and price initially returned to the neckline and confirmed it as support. However, when we started to head higher, the rally just sort of fizzled out. Nothing is really happening. It would have been much more convincing to see a powerful surge higher in LTC, but everyone is waiting on BTC to move, and it just isn't.
With that in mind, it's possible that LTC is forming a sloppy bearish diamond pattern here (in pink.) A break to the downside of the diamond would confirm the pattern, but for now, it's just something to watch. Another thing worth noting, is that whenever LTC rallies above the daily 50 EMA (which is equal to the 300 EMA (in orange) here on the four hour chart) it almost ALWAYS returns to the top of it to test it for support. As you can see with the current price action, we just sort of shot up above the daily 50 EMA, and never returned to it for a test of support. So, if Bitcoin doesn't start moving to the upside, I wouldn't be surprised to see Litecoin roll back over below the head and shoulders neckline, to test the 50 EMA for support.
On the MACD, you can see that buy side momentum was rejected at resistance, when the MACD ran into the red trendline. Since then, we have printed a bearish crossover on the four hour chart, which is a technical short-term sell signal.
At the moment, this lackluster inverted head an shoulders breakout is not very convincing, and the underlying strength indicators are showing a rollover to the downside. For now, we should pay close attention to the breakout direction of that little pink diamond above the neckline. It will be key in understanding the forward direction. Keep in mind, this is a BEAR MARKET! We are all fixated on this inverted head and shoulders pattern right now, but this could be all that we get on the upside. For all we know, BTC, LTC and the others, could just be printing another lower high on their daily charts, in the very misleading form of an inverted head and shoulders fakeout. Be smart. Be nimble. Be cautious.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
With that in mind, it's possible that LTC is forming a sloppy bearish diamond pattern here (in pink.) A break to the downside of the diamond would confirm the pattern, but for now, it's just something to watch. Another thing worth noting, is that whenever LTC rallies above the daily 50 EMA (which is equal to the 300 EMA (in orange) here on the four hour chart) it almost ALWAYS returns to the top of it to test it for support. As you can see with the current price action, we just sort of shot up above the daily 50 EMA, and never returned to it for a test of support. So, if Bitcoin doesn't start moving to the upside, I wouldn't be surprised to see Litecoin roll back over below the head and shoulders neckline, to test the 50 EMA for support.
On the MACD, you can see that buy side momentum was rejected at resistance, when the MACD ran into the red trendline. Since then, we have printed a bearish crossover on the four hour chart, which is a technical short-term sell signal.
At the moment, this lackluster inverted head an shoulders breakout is not very convincing, and the underlying strength indicators are showing a rollover to the downside. For now, we should pay close attention to the breakout direction of that little pink diamond above the neckline. It will be key in understanding the forward direction. Keep in mind, this is a BEAR MARKET! We are all fixated on this inverted head and shoulders pattern right now, but this could be all that we get on the upside. For all we know, BTC, LTC and the others, could just be printing another lower high on their daily charts, in the very misleading form of an inverted head and shoulders fakeout. Be smart. Be nimble. Be cautious.
I'm the master of the charts, the professor, the legend, the king, and I go by the name of Magic! Au revoir.
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-JD-
Comment:
And just like that, the diamond broke down hard to the downside...
