Warning: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.
24 hours can make a big difference for any asset trying to register a bullish breakout. Litecoin looked set to move back above $ 200 yesterday, aligned with a looming new test of $ 209 resistance. However, a massive bearish breakout has occurred in the past 12 hours, leaving the crypto asset in dismay.
At the time of writing this article, Litecoin is valued at $ 173 with a registered market cap of $ 11.4 billion.
Litecoin chart in 4 hours
It can be observed that Litecoin has represented signs of a bearish breakout from the start of May 31st. An ascending channel pattern was identified which eventually exhibited a massive bearish breakout. The price did not initially record a candle close above its previous resistance of $ 197 which may have drained the bullish momentum on the charts.
At the time of going to press, another bearish trait illustrated was the cross between the 20-period exponential moving average and the 20-period simple moving average. The SMA exceeding the EMA is bearish in terms of price discovery. LTC’s press time price action appeared to open an opportunity for a short position, which could be available within the next 12-24 hours.
Rationale for the contract
The Relative Strength Index or RSI indicated dominant selling pressure as the indicator fell below the neutral line. Buyers are expected to push the indicator again, but a visit to the oversold region can be expected.
The Awesome Oscillator or AO had minimal bearish momentum at the time of publication, but the outbreak could become dominant in the next few hours.
The MACD indicated a clear downtrend as the Signal line crossed the MACD line.
Important beaches to watch out for
With a bearish outlook in mind, a short entry can be opened in a recovery range of $ 188 to $ 185. With a stop-loss placed at $ 198, take-profits may be available at $ 154. The risk / reward ratio was a good 2.91x. Immediate resistances were found at $ 200 and $ 209, at time of publication.
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