Reaction to double-top pattern imminent

  • Litecoin price brushes shoulders with $32.50 resistance.
  • LTC/USD on the verge of testing key support as double-top pattern reaction occurs.

Litecoin joined the rest of the market yesterday to record slight gains above the short-term support at $31.50. The entire market correction to the upside, however, most assets are still trading closer to their key support levels. Litecoin, for instance, brushed shoulders with $32.50 but reversed the trend towards the above-mentioned support.

The declines formed a double-top pattern as seen on the 15-minutes time frame chart. The reaction to this pattern is putting pressure on the weak support at $32.00 and the 50-day Simple Moving Average (SMA). If the drop progresses below the weak support, LTC/USD will be in danger of sliding below the next support target.

However, primary support is seen at $30.00 and is strong enough to act as a barrier to bear pressure. The trend is slowly turning bearish; besides technical indicators have started sending negative signals. The Relative Strength Index (RSI) keeps heading south after being ejected from the overbought region during the Asian session on Thursday. The Moving Average Convergence Divergence (MACD) had recovered to +0.1776 but now is almost crossing into the negative region. All the indicators show that the path of least resistance is downwards in the short-term.

LTC/USD 15-minutes chart

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