- Litecoin price has formed a head and shoulders pattern on a 4-hour chart indicating a bearish outlook.
- If LTC slices through the neckline at $191.86, a 15% drop to $159.85 seems likely.
- However, a bounce from the demand barrier leading to a decisive close above $208 could invalidate the bearish setup.
Litecoin price has tapped a demand barrier multiple times in the last two weeks. Therefore, a breakdown of this level could spell disaster for LTC.
Litecoin price at crossroads
Litecoin price has seen an extended period of consolidation since March 9. During this phase, LTC has produced three distinctive peaks, with the center one being the tallest known as “head” and the other two around the same height called “shoulders.”
The valleys have a common base at $191.86, known as the “neckline.” This setup forecasts a 16.86% downtrend, determined by measuring the distance between the head and the neckline’s peak and adding it to the breakout point at $191.86.
Interestingly, Momentum Reversal Indicator’s (MRI) breakout line at $190 is within the neckline’s proximity. Therefore, investors need to wait for a decisive 4-hour candlestick close below $190 as a confirmation.
In case of a breakdown of the aforementioned level, Litecoin price will drop 16.86% to $159.86, which also coincides with another breakout line around the same level.
LTC/USDT 4-hour chart
Since a confirmation for the head and shoulders pattern will only come after the neckline’s breakdown, a bounce from it could put this bearish outlook on hold.
If this bounce leads to a decisive candlestick close above $208.13, it would create a higher high and invalidate the bearish thesis. In such a case, LTC could surge 10% to $227.88.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.