Litecoin (LTC) – Odds shifted in the bears’ favor following the recent sell-off

Litecoin (LTC) – Odds shifted in the bears’ favor following the recent sell-off

Posted on Monday, September 19 2022 at 8:23 pm GMT+0000

Litecoin (LTC) reversed sharply lower last week after failing to close above the August 14th high, to activate a Bull Trap reversal pattern, and put an end to the last three-months minor uptrend.

As the price is now hovering beneath the ascending regression channel stretched from the June 14th bottom, the oscillators are sending clear discouraging signals. The RSI is sloping south below its equilibrium line, the ROC fell without a parachute straight to the negative region, while the KST slipped below its trigger and zero lines raising the stakes for additional declines.

As regards the trend indicators, the bearish crossover between the 20- and 55-day exponential moving averages is sponsoring the negative shift in the medium-term outlook.

Hence, following a firm close beneath the August 27th bottom, the door will open for the 161.8% Fibonacci extension of the last up-leg at 41.93, that being the Bull Trap’s initial target. Below that level, the sell-off will speed up and slice through the late March 2020 bottom of 34.51 to reach the 261.8% Fibonacci level at 26.14.

Alternatively, if the bulls start fighting back and jump above the lower bar of the channel, they will face resistance from the moving averages residing around 58.00. A short distance higher, the mid-regression line may try to delay a test of the September 13th high at 67.48.

All in all, the odds have shifted in the bears’ favor following the recent aggressive decline, and a decisive close below 41.93 will pave the way for further bearish actions.