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Litecoin: How traders can capitalize on this ‘ideal’ buy entry

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Disclaimer: The findings of the next evaluation are the only real opinions of the author and shouldn’t be taken as funding recommendation

Litecoin’s near-term outlook appeared favorable because the alt closed in on an ascending triangle breakout. A northbound RSI, bullish crossover on the Directional Motion Index, and an uptick in 24-hour buying and selling volumes backed such predictions.

Nonetheless, some near-term bearishness would start to seep if LTC fails to shut above the higher trendline. Sellers would want to focus on an in depth beneath $166.2 with a view to negate a bullish final result and implement a breakout in the other way.

Litecoin 4-hour Chart

Supply: LTC/USD, TradingView

A sequence of upper lows since 4 October together with regular highs round $187 have been used to chart an ascending triangle setup for LTC. The sample units up the priority for an upwards breakout as promoting stress regularly diminishes and the alt tackles the higher trendline. Now, the formation of two pink candles introduced a perfect purchase entry on the 50-EMA (yellow).

The idea was that LTC would rebound from this shifting common line and formulate one other assault at $187.27. A detailed above this ceiling can enable bulls to march on ahead to the fast 61.8% and 78.6% Fibonacci Extension ranges. LTC may additionally tag its 100% Extension above $210 in case bulls are ready so as to add to the rising 24-hour buying and selling volumes.

Now, if LTC closes beneath the confluence of the 50-EMA and the $176-support, a more recent low might be anticipated round $170.

However, LTC would lose its bullish thesis if bears slice beneath $166.24. Following a breakdown from the sample, assist ranges of $157 and $153 would come underneath the highlight.

Reasoning

For now, fears of a breakdown appear to be uncalled for as per the RSI and DMI. Though the RSI famous a slight downtick, it nonetheless traded above the mid-line. The Directional Motion Index’s bullish crossover can also be anticipated to dissuade any near-term bearish positions.

Having stated that, an early breakout appears unlikely as nicely. This argument might be supported by a weakening MACD which highlighted receding bullish momentum.

Conclusion 

Litecoin might be anticipated to kind a more recent low round $176 earlier than difficult the higher trendline as soon as once more. Such a transfer would additionally current a perfect purchase entry for merchants prepared to lengthy the ascending triangle.

Cease-losses might be set barely beneath the $170-mark. As soon as a breakout does happen, merchants can exit their positions on the 61.8% or 78.6% Fibonacci Extension ranges after gauging the 24-hour buying and selling volumes.


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