The crypto market is bleeding, and I think we are not done yet. Take a look at Litecoin (LTC/USD). It has come down from heights around $420 (on Coinbase), and has tagged $105 back in February, and again around here in April. Now, for the third time in 2018, price is back around this area, hovering above the $100 mark, which is a psychological level as well as an apparent support.
LTC/USD Daily Chart
- Note that this $100-$105 area was a previous resistance. It is therefore a key support/resistance pivot.
- It has held a couple of times as support, so why shouldn't we anticipate support again?
- Well, the prevailing mode has been that of consolidation. Also, the lower highs while support was essentially flat around $105, meant that price was in congestion, like a triangle pattern.
- A descending triangle structure suggests pressure to the downside.
- Price is holding under the 200-, 100-, and 50-day simple moving average.
- The RSI is able to tag 30, but failed to push above 70, a reflection that bearish momentum is winning against bullish momentum.
- If price does indeed break below $100, we can anticipate support in the $70-$75 area.
- This is a little bit above the middle of a range established by Septembers volatile price action.
- I think we should limit the downside to $60. Yes $60, all the way down from $420. I think price below $100 becomes cheap for LTC/USD, but I also think there could be further downside to something like $60 - even when its cheap there could be a 40% dip before a bottom.