After forming an inverse head and shoulders on the daily chart, Litecoin led a surge across the cryptocurrency market yesterday.
Litecoin initially increased over 10% while other major cryptocurrencies failed to follow suit.
The other major cryptocurrencies did follow suit later in the day with Litecoin effectively acting as the leader for price action which it has done a number of times in the past.
The surge has since stopped, and Litecoin currently trades between $37.50 and $39.50 today.
If price can continue its increase, $41.50 to $44 is a key area of liquidity to monitor.
Price consolidated around this point during November’s drop before following up with further bearish movements.
To the downside, the neckline of the inverse head and shoulders pattern which is around $34.60 may come into play as support.
The hourly chart would indicate that shorter-term momentum is currently more disposed to the downside.
Lower highs have been forming since the surge as indicated by the black arrows.
The hourly MACD and RSI – both gauges of momentum – have also been decreasing showing increasing seller momentum.
The bullish argument would be that price is undergoing a consolidation here before recording another bullish surge.
- Litecoin leads bullish movements across the market yesterday after a 10% surge.
- Upward movements have since stopped in Litecoin. Expected resistance lies above at $41.50.
- Lower highs forming on the hourly along with increasing seller moment indicate an increased likelihood of downward movements in the short-term.
- It is also possible that price is currently consolidating before recording another surge.
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