Tuesday was a terrible day for cryptocurrencies, which dived around 30% lower, while some other cryptos, like Dogecoin and Shiba Inu coin, lost around 50% of their value. Litecoin fell from $230s to $160s in a few hours, but the chart setup is pointing to a bullish reversal now, so we decided to open a buy Forex signal in this cryptocurrency.
The decline came after El Salvador made Bitcoin legal tender in the country, which should have been a positive event for cryptocurrencies. But, the banking establishment is doing everything to discourage countries from adopting cryptocurrencies, and the president of El Salvador blamed the IMF and the World Bank for the crash in cryptos on the very day that Bitcoin was introduced to the country.
LTC/USD
Litecoin Analysis – LTC/USD Daily Chart
LTC/USD dived to $263, but that’s where the low was during most of August, so that area held again as support. The 50 SMA (yellow) helped as well, adding further to the support zone. Yesterday, Litecoin formed a doji candlestick just above that moving average – this is a bullish reversing signal after the decline.
BITCOIN had another bearish day yesterday, while Litecoin was looking better supported by these indicators. The stochastic indicator became oversold as well, which points to a reversal higher too. Based on this chart, we decided to open a buy Litecoin signal, which you can find on our Forex signals page.
Litecoin trying to push above the previous range
On the H4 chart, LITECOIN was finding support at the 200 SMA (purple), around which it has been trading for several sessions, since Wednesday afternoon. Although, the 100 SMA (green) is acting as resistance at the top, while the top of the previous range is also providing resistance. So, buyers will have some work to do to push it above the range. However, the overall sentiment looks good for Litecoin; it seems ready to jump higher once the sentiment in the crypto market turns positive.
The fundamentals look positive for Litecoin too. Litecoin has launched the Litecoin Block Explorer, which is similar to a search engine, but allows LTC holders to track all the data going through the Litecoin blockchain. Besides that, the Litecoin Foundation has also launched the ‘OmniLite’, which is a decentralized platform for token creation. So, we are on a trade here, entering at $180, with a stop just below $140, with the take profit at $230, which is just below September’s high.
Read More: Buying Litecoin, LTC Looking Set to Resume the Bullish Trend Again