By Franklin Smith
Litecoin (LTC) climbed to $61 a week ago but encountered rejection. That translated to a bearish development, especially for LTC’s long-term traders.
The market structure stayed bearish, and the asset defended the $50 psychological mark within the past couple of days. Nevertheless, selling momentum started soaring again.
Litecoin 12Hr Timeframe
May sessions saw LTC forming a range between $61 and $74. However, the range’s lows could not hold during June’s first week. Intensified selling activities saw LTC crashing towards the $40.2 lows before resurging towards $61 in the following weeks.
The plotted FIB retracement zones highlighted $61 to match the 61.8% retracement mark of the decline to $40.2 from $74. Furthermore, $61 represented the May range low. Confluence by these hurdles was sturdy, and Litecoin encountered rejection from $61.
Litecoin 4Hr Timeframe
Analysts expected the $61 rejection to secure support at $51 – $52. That represented a demand zone and boasted an optimistic order block on the 4Hr chart.
Furthermore, this area stood beyond the $50.4 long-term horizontal support. Thus, there’s another confluence between a horizontal mark and the order block. Yet the rebound from the level was weak.
A rebound emerged on two occasions within the last few days. However, each bounce could not close a session beyond $54. While publishing this block, the LTC price seemed to retrace beneath the demand zone and the $50.4 support floor.
The 4hr RSI dropped beneath the 50-neutral over the past few days and retested the mark as resistance. That confirmed momentum favoring bears. Moreover, the Chaikin Money Flow agreed, confirming substantial capital outflows from the market within the last couple of days.
Meanwhile, the OBV didn’t highlight massive selling momentum. It has climbed higher within the previous week and recorded a minor slump within the last three days.
Final Thought
Litecoin’s price actions within the past days confirmed $50 – $52 as a critical support level. Meanwhile, a session closing below the $50 psychological mark might see LTC on extended downsides.
Thus, aggressive sellers might consider entering short positions following a session closing below $50. They can place a stop loss beyond $52. Meanwhile, the $48 FIB retracement can offer temporary support, under which LTC will explore $40.