Litecoin traders who sell short should consider LTC’s inability to break above this level

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Disclaimer: The conclusions of the following analysis are the sole opinions of the author and should not be taken as investment advice.

Litecoin [LTC] hasn’t seen much volatility in recent weeks, compared to the rest of the altcoin market. Last month, LTC hovered between $52 and $64, a modest price difference of 22% measured from the bottom.

In the meantime, Bitcoin [BTC] slipped below the $20.8,000 support after a firm rejection at $24,000 in mid-August. The Dominance of USDT The metric has also risen over the past month to indicate investors are turning to Tether holdings and fleeing the crypto market.

The fear could increase further in the coming weeks, and Litecoin traders may be positioned to capitalize on the resulting price movement.

LTC – 1 day chart

Source: LTC/USDT on TradingView

The visible range of the volume profile showed the control point (red) at $55.07. The low and high value zone sits at $42.68 and $69.3 respectively. The volume tool highlighted that much of the trading activity since June has been in the extremes marked on the chart.

Since June, the price has formed a range between $65 and $43.4, values ​​quite close to VAH and VAL. At press time, LTC traded hands at $61.26 per coin and there was some upward momentum based on the past few days of trading.

It was likely that the $65-$69 region would strongly oppose bullish intentions, and a test of this zone could provide opportunities to sell or short Litecoin. A stop-loss above $70 can be considered, with a take-profit at $55.1 (PoC) and $42.6 (VAL).

Reasoning

Litecoin is approaching the top of the June range, could the coin offer a selling opportunity?

Source: LTC/USDT on TradingView

The Relative Strength Index (RSI) has been stuck between 60 and 40 and has been since July. This indicated the formation of a range for an asset. At the time of writing, the RSI is approaching 60 and may face rejection in the 60-65 band. The Stochastic RSI has also approached overbought territory.

The Directional Movement Index (DMI) also supported the idea of ​​range formation. The Average Directional Movement Index (ADX) has been unable to climb above the 20 mark and hold there in recent months. This indicated the absence of a strong trend behind Litecoin. The Chaikin Money Flow (CMF) also remained in the neutral zone around 0, or below -0.05.

Conclusion

Taken together, the indicators showed a lack of a strong trend behind Litecoin and also some selling pressure in recent weeks. It did not yet seem likely that LTC could break above the $69 resistance. Bitcoin was also in a perilous position for bulls. Therefore, a sharp decline in LTC cannot be ruled out in the coming weeks.


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