Bitcoin is exchanging hands close to the .618 Fib — a common take profit level where traders and investors tend to reduce risk and reshuffle their portfolios.
As prices trend higher, the Relative Strength Index (RSI) on the daily chart is printing lower highs. Should prices trend below $45,000 in the immediate short term, then one could expect a strong sell-off to the key January S/R level ($42,100).
In a sharp pull-back scenario, bulls must hold the $40,000 psychological level (daily close) in order to sustain a longer-term rally to higher targets.
Levels to watch
- $51,000 (.618 fib level resistance level).
- If captured, then the $57,300 (.786 fib level) is the next point of interest.
- If $40,000 (psychological support) is lost then $26,000 is the next support area.
In the first week of August, we discussed the possibility for Litecoin to continue its rally to $220 before potentially facing increased selling pressure. The coin has followed in Bitcoin’s footsteps since then, gaining momentum both in Dollar and Bitcoin terms.
As it stands, Litecoin’s compelling historical precedent has set the stage for a strong reversal, which is not yet complete. Despite being in overbought territory, Litecoin’s Relative Strength Index does not suggest a weakening trend. As such, if Bitcoin maintains its bullish trajectory, it’s likely that LTC/USD will outperform the king crypto (provided BTC.D continues to trend lower).
The .618 Fib retracement on the LTC/USD pair rests at $295, representing a potential 58% gain from current prices.
Levels to watch
- Daily Close below $165 suggests a pull back to the 2019 high.
- $220 reclaim suggests a move to weekly resistance at $267.
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