The price of Litecoin has attempted to break out to the upside above its significant horizontal resistance but failed to do so as it was pushed back below it shortly.
- Cup and handle being formed with the pattern looking near completion.
- A breakout from both sides is equally likely but the price found strong resistance above the significant horizontal level at $122.32
- I would be expecting a breakout to the downside for interaction with the $114.32 level as a retest of support.
In the last 24 hours, the price of Litecoin has increased from $120.265 which was the lower resistance level from the horizontal range in which the price is consolidating from the 5th of July above the significant horizontal level at $122.32 but hasn’t managed to stay above and fell in a sharp manner below the $120.265 level and is now retesting it.
On the hourly chart, we can see that the price action from the 4th of July formed a cup and handle pattern with today’s decrease being the handle.
Prior to the formation of the cup and handle we have seen a three-wave increase which is most likely the second correctional structure from the higher degree correction in which case the currently seen cup and handle would be its prolongation.
As the price hasn’t caught enough momentum for a breakout above the median point of the resistance area a retracement has been seen in a five-wave manner but it might not have ended which is why we could see another decrease to around $119 level which is the median point of the horizontal range.
After a small corrective upside move for another retest of the handles upper outline level, I would be expecting a breakout to the downside, but if the price manages to hold above $118 we could see a fakeout before another upturn above $122.32.
Prior to the formation of the ABC to the upside and the cup and handle we’ve seen a five-wave decrease in an impulsive manner which ended as a retest of the prior low level at $114.32.
This level might again be retested on the expected downfall but we could see further decrease below it to the next significant horizontal level at around $109 if this whole structure was the 2nd wave out of the higher degree correctional structure.
This would be the Z wave of the complex correction count and would mark the completion of the correction which started on the 12th of June when the price of Litecoin reached $142.737 which was it’s yearly high.
After its completion, I would be expecting either a trend continuation to the upside or some correctional upside movement which could exceed the yearly high and will be assessed by the seen momentum.