Litecoin could be in for a huge drop in its pairing with the US Dollar, if the pattern on the 4-hour chart holds water.
Bitcoin and altcoins have had a few days to forget, as bulls show signs of increasing lack of momentum and bears appear to be creeping into the market.
Litecoin is heavily correlated with Bitcoin prices, and with Bitcoin heading lower to test the 30,000 price mark, it makes logical sense to expect Litecoin to move in tandem with the BTCUSD pair.
The lower highs on the 4-hour chart also point to the possibility of short-term bearish exhaustion.
Technical Outlook for LTCUSD
The pattern in formation is a descending triangle. Price is now approaching the lower border of the triangle, with a view to testing it. A breakdown of the triangle allows the LTCUSD pair to target the initial support at 112.42 (previous high of 18/24 December 2020). Further support lies at 93.80 and 84.49, and these could be put to the test if the price continues in the measured move, searching for the price projection of 71.28.
On the flip side, a bounce on the 119.70 price level, which is the lower border of the triangle, allows for a retest of 138.62 (27 December 2020 high), with 147.58 and 164.82 serving as additional targets to the north. Attainment of 164.82 invalidates the triangle, but only a break above 180.68 allows the uptrend to resume.
Dow Jones ended 2.32% higher at 25,595 after the index tested and bounced from the 50-day moving average. The index rejected several times the last two weeks at the 200-day moving average. The short term picture has improved after yesterday’s gains, but the long term outlook remains bearish below the 200-day moving average.
On the upside, first resistance for the Dow index stands at 25,601 the high from yesterday. A move above 25,601 might open the way for a test of 25,027 the high from June 24. If the bulls continue then the next supply zone for the Dow Jones is at 26,274 the 200-day moving average.
On the flip side, immediate support for Dow Jones index is at 25,096 the low from yesterday. Next support for the Dow Jones will be met at 24,952 the 50-day moving average. A break below 24,952 might open the way for a test of 24,755 the 100-day moving average.
LTCUSD 4-Hour Chart