PRICE ACTION
Let’s strip back all the indicators and take a 30,000 feet look at the technicals for Litecoin. Firstly, and not visible on the charts is the reduction in mining hashrate since the halving of the block reward. Reduction in mining – essentially – recalibrates the efficiency of mining for all active miners and makes mining more profitable per power usage. The more efficient, the less LTC needs to be sold on the market to cover costs…
Starting at 5m, we can see a subtle lower sloping trend still remains; but it is beginning to arch into a flatter progression. Usually, people would be looking for a flagging pattern of some sort (aka ‘Dead Cat Bounce’); but here the downward pressure hasn’t really found a flood of bullishness. For bulls, this is good news – as it requires the sellers to use all their powder and run out of supply.
On the 1D chart; the most important thing to watch right now is how the 28D moving average is acting as the resistance (as is demonstrated by the downward trending white line. In the future, when it is time to talk about bullish breakouts – this is likely the trend to pay attention to!
The 1W chart is probably the most disappointing of all the timeframes. Just like the start of it’s bullish rally – LTC is the first major coin to break back below it’s 52W moving average. Importantly, the week isn’t finished yet – but things are not looking great in respect to a recovery right now. The 13W moving average is trending down and on a crossing path with the 26W MA in probably the next 4 weeks. Bulls would need to turn the direction of travel within the next 2 weeks to avoid that bearish cross from occurring.
Finally, the 4H chart shows an interesting argument for finding support in this area (at least temporarily…). Since 15-Aug; LTC has been in a channel of chop between 71 – 78; which is a $7 variation in price. The technical target on a breakout like this would be equal to the prior range – being $7. We are currently hovering in the $64 zone; which is $7 below the previous support…Again, that is only a target; and by no means a proof of recovery; but there will be some shorts closing out in this area.
OPEN INTERESTS (BITFINEX)
Long: 3.98 Days
Short: 1.33 Days
RELATIVE STRENGTHS
ON BALANCE VOLUME
KEY PRICE AREAS
Resistance: 67 (52W MA), 70, 80 (28D MA)
Support: 60, 55, 50
PREVIOUS ANALYSIS
Let’s strip back all the indicators and take a 30,000 feet look at the technicals for Litecoin. Firstly, and not visible on the charts is the reduction in mining hashrate since the halving of the block reward. Reduction in mining – essentially – recalibrates the efficiency of mining for all active miners and makes mining more profitable per power usage. The more efficient, the less LTC needs to be sold on the market to cover costs…
Starting at 5m, we can see a subtle lower sloping trend still remains; but it is beginning to arch into a flatter progression. Usually, people would be looking for a flagging pattern of some sort (aka ‘Dead Cat Bounce’); but here the downward pressure hasn’t really found a flood of bullishness. For bulls, this is good news – as it requires the sellers to use all their powder and run out of supply.
On the 1D chart; the most important thing to watch right now is how the 28D moving average is acting as the resistance (as is demonstrated by the downward trending white line. In the future, when it is time to talk about bullish breakouts – this is likely the trend to pay attention to!
The 1W chart is probably the most disappointing of all the timeframes. Just like the start of it’s bullish rally – LTC is the first major coin to break back below it’s 52W moving average. Importantly, the week isn’t finished yet – but things are not looking great in respect to a recovery right now. The 13W moving average is trending down and on a crossing path with the 26W MA in probably the next 4 weeks. Bulls would need to turn the direction of travel within the next 2 weeks to avoid that bearish cross from occurring.
Finally, the 4H chart shows an interesting argument for finding support in this area (at least temporarily…). Since 15-Aug; LTC has been in a channel of chop between 71 – 78; which is a $7 variation in price. The technical target on a breakout like this would be equal to the prior range – being $7. We are currently hovering in the $64 zone; which is $7 below the previous support…Again, that is only a target; and by no means a proof of recovery; but there will be some shorts closing out in this area.
OPEN INTERESTS (BITFINEX)
Long: 3.98 Days
Short: 1.33 Days
RELATIVE STRENGTHS
- Micro (5m): Neutral
- Short Term (4h): Slightly oversold
- Mid Term (1D): Weak
- Macro (1W): Neutral
ON BALANCE VOLUME
- Mid Term (1D): Falling
- Macro (1W): Weakening
KEY PRICE AREAS
Resistance: 67 (52W MA), 70, 80 (28D MA)
Support: 60, 55, 50
PREVIOUS ANALYSIS
Here, we can see that the slope of the previous trend has been broken and price is beginning to inch its way back to $66.
5 minute candles can help us identify nuances in patterns; but should not be used to making larger time frame trading choices.