Litecoin traders going short must consider LTC’s inability to break past this level

Disclaimer: The results of the following analysis are the only opinions of the writer and should not be considered investment advice.

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

Meanwhile, Bitcoin [BTC] it slipped below the $ 20.8k support after a firm rejection at $ 24k in mid-August. The USDT Dominance metric has also increased in the past month to indicate that investors are shifting to hold Tether and fleeing the cryptocurrency market.

The fear could increase further in the weeks to come and Litecoin traders can be positioned to take advantage of the resulting price movement.

LTC- 1 day chart

Litecoin is approaching the high end of June, could the coin offer a selling opportunity?

Source: LTC / USDT on TradingView

The Volume Profile Visible Range showed the Point of Control (red) to be found at $ 55.07. The Low and High Value area stands at $ 42.68 and $ 69.3 respectively. The volume tool showed that much of the trading activity since June has returned to the extremes marked on the chart.

Since June, the price has been in a range of $ 65 to $ 43.4, which is close enough to VAH and VAL. As of press time, LTC has traded hands at $ 61.26 per coin and there has been upward momentum based on the past few trading days.

It was likely that the $ 65- $ 69 region would firmly oppose bullish intentions and a test of this zone could offer 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).

Rationale

Litecoin is approaching the high end of June, 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 stuck since July. This was indicative of forming a range for an activity. At the time of writing, the RSI was approaching 60 and could be pushed back into the 60-65 range. The Stochastic RSI has also moved closer to overbought territory.

The Directional Movement Index (DMI) also supported the idea of ​​interval training. The Average Directional Movement Index (ADX) has not been able to cross the 20 mark and stay there for the past few months. This indicated the lack of a strong trend behind Litecoin. The Chaikin Money Flow (CMF) also remained in the neutral area around 0, or below the -0.05 threshold.

Conclusion

Taken together, the indicators have shown a lack of strong trend behind Litecoin and also some selling pressure in the past few weeks. It still didn’t seem likely that LTC would be able to break out of the $ 69 resistance. Bitcoin was also in a dangerous position for the bulls. Therefore, a strong downward move for LTC cannot be ruled out in the coming weeks.

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