Litecoin has been trading sideways inside a range, with support around $30.500 and resistance at $34.000. Price just bounced off support and might be aiming for another test of resistance.
The 100 SMA is crossing below the longer-term 200 SMA to indicate that the path of least resistance is to the downside. In other words, support is more likely to break than to hold. Price is also trading below both moving averages to confirm that selling pressure is in play, but the moving averages might simply be oscillating to reflect consolidation.
Volume is relatively subdued, although it has picked up slightly as buyers returned to defend the floor. Stochastic is pointing higher to signal that there is bullish pressure left, but the oscillator is also nearing the overbought zone to indicate exhaustion. Turning lower and moving south could confirm that sellers are returning. A break below support could spur a drop that’s the same size as the rectangle pattern.
Cryptocurrencies appear to be pulling up from key support levels over the past 24 hours as bulls may be buying on dips once more. However, it remains to be seen whether or not the buying momentum can be sustained as profit-taking has been quick in recent weeks.
Litecoin has been overtaken by Tether in the cryptocurrency rankings in CoinMarketCap, slumping to seventh place in terms of market cap. Tron has also been climbing the charts, so it’s understandable that the other heavyweights are seeing more losses in value as traders move their holdings to the stronger coins.
Risk aversion in general financial markets is also making things more challenging for litecoin and its peers as traders remain hesitant to take on more risk. Uncertainties related to trade tensions and Brexit appear to be dampening demand for higher-yielding assets lately.