- Litecoin bulls attempt to re-enter the $60’s zone but technical levels are still in favor of the sellers.
- A reversal is imminent in the near-term but not after a consolidation phase.
Litecoin fell victim to the general plunge in the market and Bitcoin’s epic slump to levels around $8,135. The Tuesday American session drop smashed past several key support areas including the simple moving averages where the 100 SMA on the four-hour chart was holding ground at $71.57 and the 50 SMA at $70.39.
The downside extended below the $70 tentative support as bears warmly embraced the selloff. LTC corrected under the Bollinger Bands four-hour lower curve before extending the lower as far as $55.00.
The trading today has been generally bullish with Litecoin buyers battling to re-enter two prominent zones. The zones above $60 and the BB four-hour lower curve. Despite the 3.6% increase in value on Wednesday, the relative strength index is stuck in the oversold. This means that Litecoin was extremely oversold and a reversal is imminent but could take a while to be realized.
Besides, the moving average convergence divergence is deep in the negative zone. The negative divergence highlights the presence of selling pressure. At the same time, the correction of the 50 SMA below the 100 SMA at $71.72 suggests that a lower consolidation will dominate before a significant reversal is staged.