Litecoin recently made a low as all cryptocurrencies and then a bounce higher followed. As in most cryptocurrencies, our view is that this bounce will be short lived and another wave of selling will follow. Litecoin in particular has been forming lower lows and lower highs and unless bulls manage to recapture $286, we should expect another round of strong selling to push price towards $200 and lower.
Red rectangles- lower highs
Green rectangles – lower lows
Litecoin has reached our $330 target and then reversed strongly lower. Price is in the process of making lower lows and lower highs. This is a typical bearish formation and it came naturally after a multi month upward trend in prices. Let us not forget that a few months back in October 2020 price was below $50. It is justified after such a bull run for prices to make a correction. This is both healthy for the up trend and would provide more fuel for the next bullish wave. Technically price is vulnerable around current levels for a reversal lower. Bulls need to break above $286 in order to hope for a new higher high above $330 area. At current levels I believe the best risk reward ratio is offered by bearish positions. I’m bearish as long as price is below $286 looking for more downside.
The material has been provided by InstaForex Company – www.instaforex.com
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