- Litecoin is firmly back within the market bears control, as the price falls for five consecutive sessions.
- LTC/USD price action has breached a bearish flag structure, which has left it vulnerable to further downside risks.
LTC/USD: Recent Price Behavior
The Litecoin price has been hit by a wave of sellers, over the past few sessions. It has been falling for five consecutive days. LTC has lost as much as 30% within the noted period, the lowest levels seen since March 2019. The selling commenced on 19 September, following the daily candlestick forming a hanging man pattern. It was a sell signal, indicating that the recent small trend higher had come to an end.
LTC/USD had started consolidating at the back-end of August, following brutal selling that had initially come into play late June. The downside momentum was carried through July and picking up further pace in August. During the move south, there were several periods of consolidation. Price action was forming bearish pattern structures, which were subject to breakout and were capitalized on by the bears.
Punishing Bearish Flag Breakout
As mentioned above, Litecoin was moving within consolidation mode, following some harsh selling in the prior weeks. During this easing period from selling, price action formed a bearish flag structure. It was being constructed between 30 August to 22 September. One final rejection at the upper acting trend line of the flag was seen between 18 – 19 September, triggering the bears to resume control.
A breakout of the flag was seen on 23 September, a strong bearish candlestick produced via the daily. The door was left wide open to further selling pressure, which the bears have capitalized on and continue to do so at the time of writing. Sellers are testing a critical demand zone to the downside, running from $65 down to $55. An area which has previously attracted much buying interest. There is a possibility that LTC sees a daily closure before, which could prove to be very punishing.
2019 Gains Almost Wiped Out
At the start of 2019, Litecoin was on a strong path to recovery, it gained as much as 550%, after starting the year as low as $30. The run higher at the time was showing a strong resemblance to the 2017 bull run. However, this time around, LTC/USD had actual historical levels to work with, which clearly caused a large slowdown. The price is now only some 40% away from completely reversing the 2019 bull run.
In terms of bias, it remains tilted to the downside, targets eyed at; $41.00 and then $30, which would take the price back to the start of 2019 levels. Stops to be placed just above the current zone at $66.
Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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