Litecoin (LTC) has been falling since May, breaking long-term horizontal support.
There are currently no clear bullish signs in sight. However, LTC will likely trade within a descending wedge and potentially create a double bottom.
Litecoin has been down since May 10, after hitting an all-time high of $ 417, and the downtrend continued to hit $ 116 on May 23.
Although the LTC price initially rose, it resumed its downtrend due to the lack of buying pressure at higher levels. On July 18, it broke below the horizontal support area of $ 135 and is currently at the 0.786 fib retracement support of $ 107. If the price doesn’t bounce off this level, the next support is found at around $ 60.
Technical indicators are falling. The MACD is moving down, the RSI is below 50 and the Stochastic oscillator has created a bearish cross (red symbols).
Weekly LTC / USDT Chart | Source: TradingView
The daily chart shows that the LTC has been moving along a descending resistance line since May 19th, last resistance from this line on July 12th.
While it is possible that LTC is also moving along the descending support line (dashed line), the line has only been validated twice so far and is therefore not yet confirmed.
Both lines can be combined to form a descending wedge, which is often viewed as a bullish pattern.
Similar to the weekly timeframe, the technical indicators are bearish on the daily timeframe.
LTC / USDT daily chart | Source: TradingView
Trader @CryptoTony_ outlined an LTC chart indicating that the current wedge pattern could break out and rebound.
Since the tweet, LTC has broken below the short-term wedge outlined.
While there isn’t a clear bullish sign, it is possible that LTC will create a double bottom.
There are also unconfirmed bullish divergences in the RSI and MACD.
However, LTC needs to recover quickly to confirm these divergences.
LTC / USDT 6-hour chart | Source: TradingView
LTC / BTC has fallen along with a descending wedge since May 20th.
The descending wedge is often viewed as a bullish pattern.
In addition, the MACD, RSI, and Stochastic Oscillator all created bullish divergences.
On a breakout, the closest resistance is 0.0049.
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