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LTCBTC has printed a highly reliable bearish reversal pattern. If the pair drops below this classic technical chart formation, prices could potentially test lower levels.
LTCBTC has been in a short term uptrend as is evident from the series of rising price peaks and rising price troughs on the 4 hour chart. The pair rallied from its September 12 bottom of 0.007600 as buyers’ gradually regained confidence to push prices all the way to its September 23 peak of 0.009400.
Nevertheless, that level marked an important resistance zone, coinciding with two distinct price reversal zones in the past one month. The inability of bulls to lift LTCBTC through this key hurdle signalled weakness in the pair. Sensing an opportunity, bears thereafter intervened to drive prices lower to current levels of 0.008600.
During the unfolding of this entire price action on the 4 hour chart, LTCBTC has plotted a complex head and shoulders top formation, with 0.008600 marking the neckline of the pattern. If prices convincingly close below this neckline, the short term sentiment in the pair would have decisively turned bearish, with LTCBTC likely to retest its September 12th trough.
Also adding to the immediate negative outlook is the Moving Average Convergence Divergence (MACD) dipping below the all-important zero line, signalling that sellers are the dominant group at this point of time.
LTCBTC Resistance: 0.008900/0.009400
LTCBTC Support: 0.008600/0.008000
Entry Point: 0.008520 BTC
First Target: 0.008080 BTC
Second Target: 0.007680 BTC
Stop Loss: 0.008920 BTC
Entry Point: 0.008920 BTC
First Target: 0.009400 BTC
Second Target: 0.009820 BTC
Stop Loss: 0.008600 BTC
- Absence of greater than average volume in the event of a breach below 0.008600 could be a red flag
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