Litecoin price declined heavily below 0, but it found support near 5 against the US Dollar. LTC is currently rising, but it is likely to face a strong resistance near 0.
- Litecoin started a strong decline below the 5 and 0 support levels against the US Dollar.
- The price is rising from the 5 zone and it is testing the 100 simple moving average (4-hours).
- Earlier, there was a break below a key ascending channel with support at 5 on the 4-hours chart of the LTC/USD pair (data feed from Kraken).
- The price must clear the 0 resistance to move back into a positive zone.
Litecoin Price Recovers above 0
Recently, we saw a sharp decline in bitcoin, Ethereum, ripple and litecoin against the US Dollar. LTC price formed a short-term top near the 5 before starting the drop. It broke many important supports near 5 to move into a bearish zone.
There was also a break below a key ascending channel with support at 5 on the 4-hours chart of the LTC/USD pair. Litecoin price even broke the 0 support and the 100 simple moving average (4-hours).
There was a spike below the 5 support before the bulls showed near 5. A low is formed near the 3 level and the price is currently rising. There was a break above the 5 and 0 levels. The price recovered above the 23.6% Fib retracement level of the downward move from the 6 high to 3 low.
Source: LTCUSD on TradingView.com
It is now approaching the 0 resistance level and the 100 simple moving average (4-hours). The 50% Fib retracement level of the downward move from the 6 high to 3 low is also near 0 to act as a resistance.
If there is a clear break above the 0 resistance, the price could start a strong increase. In the stated case, the price is likely to continue higher towards the 5 and 0 levels.
Fresh Dip in LTC?
If Litecoin price fails to clear the 0 resistance level, there could be another pullback. An initial support on the downside is near the 5 level.
The first major support is forming near the 2 level. Any further losses may perhaps send the price towards the 4 support in the coming sessions.
Technical indicators:
4-hours MACD – The MACD is slowly moving into the bullish zone.
4-hours RSI (Relative Strength Index) – The RSI for LTC/USD is currently correcting higher towards 50.
Major Support Levels – 5 followed by 4.
Major Resistance Levels – 0 and 5.