Litecoin Technical Analysis: (LTC/BTC) Looking For Support Going Into Q2
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Litecoin is looking bearish going into April, but we could see a bullish run take over as the alt-coin sets up a second head and shoulders (H&S) pattern.
Looking at the 1 day chart above, we can clearly see a well-formed H&S pattern which took over 7 months to complete. Both the entry and exit point of the first pattern can be found along the 0.786 fib level, along with the neck-line at 10,000 Sats. In the chart below, we can see a bullish ascending triangle pattern linking the two H&S formations, which confirmed the trend reversal.
The left shoulder of this new potential H&S pattern was formed by the pre-Christmas surge we witnessed at the end of last year, where LTC rocketed to $365. The head formed later in February as investors gathered to benefit from the Litecoin Cash hardfork as well as the highly anticipated launch of Litepay – which collapsed before ever materialising.
The new entry point for this pattern could potentially lie around the 0.618 fib level with the neck-line looking promising at 0.5 fib level / 14,000 Sats.
Judging from this retracement, we could expect LTC to return to 14,000 Sats (around $96.88 at current market value) by April 9th, before retesting the 0.236 fib level with new support at 20,000 Sats ($138.40) around May 2nd. This would form the new peak of the right shoulder, where we would then anticipate a bearish sell off to follow.
From there we would hope to see the price action rebound off the 0.618 fib level / 11300 Sats to continue the general uptrend and find its next resistance at 0.382 fib level / 16600 Sats.
To receive additional confirmation of this pattern, we do not want to see the 50/200EMA converging until after the right shoulder peak is formed. If the moving averages do cross, then we would expect to see a heavy sell-off as Litecoin supporters flock to withdraw their LTC across into more stable assets.
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