Litecoin Stuck Between Moving Averages
Hello traders. Looking at Litecoin on the 4 hour chart. There are many moving averages on this chart to look at. Litecoin is currently boxed in by resistance and support. If you look at the blue circle I have on the chart you will see all the resistance that is above Litecoin at the moment. The thick red MA is the 50 MA on a daily time frame. It is labeled 50d on the chart. The orange MA in the blue circle that is currently on a crash course with price is the 120 MA on a for hour time frame. Above the 50d MA there is a pink dash that represents the 4 hour 200 MA. The 4 hour 200 MA is also sloping down and heading toward price. On any price rallies in Litecoin in the near future, price will also find resistance from the yellow down sloping trend line and the two upper blue horizontal lines labeled as zone 1. Below price the pink dash on the chart is the 200MA on the daily (d200). This MA is acting as rising support and has been the most supportive MA time frame for price in Litecoin while it has been in the triangle.
Price is trading between the larger time frame moving averages with no real direction. Price is stuck on the area on the chart labeled zone 2 where price action has used that area as support and resistance in the past. The blue MA (20 4 hour) and the thin red MA (50 4 hour) on the chart have now turned into support, and both are starting to slope up. This would suggest we should see a short term rally in price. But with the larger time frame moving averages so closely above current price action, there is no room to set profit targets to the up side - unless you are expecting an immediate strong move in price action that can move through all the falling moving averages and attempt a breakout of the upper down sloping trend line of the triangle.
With the moving averages closing in on price action I would speculate in the near term we will see price bounce around with no direction. In this situation I am looking at a few different things that can happen with price and the moving averages. One outcome could be that the longer time frame moving averages in the blue circle will push price down and force price to retest the lower up trend line of the triangle or retest the d200MA. From there the moving averages could continue to act as resistance and force a breakout of the triangle to the downside or force price to trade below the d200MA. That would be very bearish if it happened.
If price is able to find support on the lower area of the triangle or the daily 200MA and hold if pushed to that area by the moving averages in the blue circle, we could see a shift in the relationship of price and the moving averages where price will be trading above all the moving averages on the chart. That would indicate we could see a rise in prices from there because all the falling resistance that is currently on the chart would be below price and transform into support. This would make it easier to find profit targets to the up side.
Price could also not drop from its current location when making contact with the moving averages in the blue circle and price action could start trading above them one by one. This would lead us to a breakout attempt of the upper trend line of the triangle. From there one could buy the breakout, buy a throwback to the upper triangle trend line, buy off zone 1 if it becomes support, or buy off the moving averages if they become support.
Time is limiting how long we will be in this triangle. There will be a forced breakout by the interesting trend lines of the triangle in the near future with or without a strong move in price. The scenarios I just listed with the moving averages will work even if they happen outside the triangle. You just take the intersecting trend lines out of the equation and use the moving averages. More than likely price will be out of the triangle before the scenarios play out. Good trading to all. This is not a recommendation to place a trade.
Price is trading between the larger time frame moving averages with no real direction. Price is stuck on the area on the chart labeled zone 2 where price action has used that area as support and resistance in the past. The blue MA (20 4 hour) and the thin red MA (50 4 hour) on the chart have now turned into support, and both are starting to slope up. This would suggest we should see a short term rally in price. But with the larger time frame moving averages so closely above current price action, there is no room to set profit targets to the up side - unless you are expecting an immediate strong move in price action that can move through all the falling moving averages and attempt a breakout of the upper down sloping trend line of the triangle.
With the moving averages closing in on price action I would speculate in the near term we will see price bounce around with no direction. In this situation I am looking at a few different things that can happen with price and the moving averages. One outcome could be that the longer time frame moving averages in the blue circle will push price down and force price to retest the lower up trend line of the triangle or retest the d200MA. From there the moving averages could continue to act as resistance and force a breakout of the triangle to the downside or force price to trade below the d200MA. That would be very bearish if it happened.
If price is able to find support on the lower area of the triangle or the daily 200MA and hold if pushed to that area by the moving averages in the blue circle, we could see a shift in the relationship of price and the moving averages where price will be trading above all the moving averages on the chart. That would indicate we could see a rise in prices from there because all the falling resistance that is currently on the chart would be below price and transform into support. This would make it easier to find profit targets to the up side.
Price could also not drop from its current location when making contact with the moving averages in the blue circle and price action could start trading above them one by one. This would lead us to a breakout attempt of the upper trend line of the triangle. From there one could buy the breakout, buy a throwback to the upper triangle trend line, buy off zone 1 if it becomes support, or buy off the moving averages if they become support.
Time is limiting how long we will be in this triangle. There will be a forced breakout by the interesting trend lines of the triangle in the near future with or without a strong move in price. The scenarios I just listed with the moving averages will work even if they happen outside the triangle. You just take the intersecting trend lines out of the equation and use the moving averages. More than likely price will be out of the triangle before the scenarios play out. Good trading to all. This is not a recommendation to place a trade.
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