Welcome to this analysis where we are looking at Litecoins perspective. Firstly it has to be noted that Litecoin is currently one of the more weaker pairs with a more than shape as it also already confirmed pressure to the downside on the more short-term 12-hour timeframe perspective, also on the higher timeframe it differs from many other currencies as it is still trading way below the established pre-corona highs where the majors like Ethereum or Bitcoin are already above these levels, this is why we should look at Litecoin individually which can provide worthwhile and do not take the market simply in one direction as the divergences between the currencies increasing.
As you can watch now in my chart Litecoin is building this massive head and shoulder formation here which is also building within this descending-channel-formation where Litecoin will test the upper boundary the next times with the right shoulder development, in Litecoins past it already confirmed this boundary several times to the downside and formed movements from there, besides that Litecoin is trading below the 20-EMA in red and below the 60-EMA in black where it still has some serious resistance all together forming strong resistance layers where Litecoin will have a hard time going above this is why the confirmation of this huge head and shoulder formation is currently more likely and expected than the one as Litecoin firstly needs to take the strong resistance layers out where it is more possible that these confirm to the downside.
Now when Litecoin shows up with the more likely breakdowns of the head and shoulder formation this does not mean Litecoin will be completely and there is no possible reversal from this upcoming, when the breakdowns show up Litecoin will continue till there is substantial support found which can reverse this dynamic again which will be in this case within the middle-line of the channel as it is marked in red in my chart, this level can also be the destination of the major wave-counts forming here, when Litecoin manages to recover in this level it can setup anew to form a breakout above the upper boundary of the channel which can alter the whole situation again, for now it is important to anticipate how Litecoin will move further within the right shoulder and if this forms a breakout to the downside or a decisive move to the upside of which the scenario is more within a likely spectrum as already mentioned.
In this manner, thank you for watching the analysis, have a good day and weekend, feel free to support and all the best!
Information provided is only educational and should not be used to take action in the markets.