Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
24 hours can make a lot of difference for any asset trying to register a bullish break. Litecoin looked all set to return above $200 yesterday, aligned with an imminent re-test of the $209-resistance. However, a massive bearish breakout unfolded over the past 12 hours, one leaving the crypto-asset in dismay.
At the time of writing, Litecoin was valued at $173 with a recorded market cap of $11.4 billion.
Litecoin 4-hour chart
It can be observed that Litecoin pictured signs of a bearish breakout from the beginning of 31 May. An ascending channel pattern was identified, one which eventually exhibited a massive bearish breakout. The price initially failed to record a candle close above its previous resistance of $197, something that may have exhausted bullish momentum on the charts.
At press time, another bearish trait pictured was the crossover between the 20 period-Exponential Moving Average and the 20 period-Simple Moving Average. The SMA overcoming EMA is bearish in terms of price discovery. LTC’s press time price action seemed to be opening up an opportunity for a short position, one that could be available over the next 12-24 hours.
The Relative Strength Index or RSI pointed to dominant selling pressure as the indicator dropped 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 press time, but the outbreak could become dominant over the next few hours.
The MACD pointed to a clear bearish trend as the Signal line crossed over the MACD line.
Important Ranges to watch out for
Keeping a bearish outlook in mind, a short entry can be opened at the recovery range of $188-$185. With a stop-loss placed at $198, take-profits can be available at $154. The Risk/Reward ratio was a healthy 2.91x. The immediate resistances were found at $200 and $209, at press time.