Disclaimer: The findings of the following article are the sole opinion of the writer and should not be taken as investment advice
The crypto market has been noting gradual drops after a period of consolidation. This was particularly visible in the altcoin market and such was the case for Litecoin’s price action. The coin’s price has been consolidating in the short-term, and another sell-off can be expected in the market.
The current trading value of the digital asset was $106 with a market capitalization of $6.9 billion.
Litecoin one-hour chart
Source: LTC/USD on TradingView
The above one-hour chart of Litecoin highlighted the consolidation between the support at $102.57 and resistance at $103.46. Even though the value of LTC has breached the support, there was not enough volume to confirm the trend. Despite a push and pull by the traders in the market, a fall for LTC seems imminent, giving an opportunity to short the asset.
Reasoning
The Relative Strength Index has bounced back from the support line of the oversold zone. LTC was pushed into the neutral zone but has remained close to being oversold. Although the price has not yet stabilized, the cryptocurrency may witness another sell-off before it could stabilize.
The Awesome Oscillator showed strong sell pressure in the market. The AO has maintained its position under the zero-line, and due to the saucer formation, wherein two green bars are followed by a red bar confirms the bearishness in the market.
Position
Entry: $103.90
Stop-Loss: $105.40
Take-Profit: $ 98.58
Risk-to-Reward: 3.55
Conclusion
The short-term momentum in the market was decreasing and bearishness was evident in the market. Although buyers are trying to stabilize the price, the chances of a sell-off are visibly higher. This could provide an opportunity for traders to short LTC and take-profit at $98.58.
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