Analyst Expects Pain for Litecoin as It Paints “Bearish Engulfing Candle”

  • Litecoin (LTC) has surged 42 percent in a three-week winning streak.
  • But the rally showed signs of exhaustion upon testing a “huge falling resistance” for a breakout.
  • LTC printed a so-called “bearish engulfing candle,” which, according to financial analyst Vince Prince, spells downside risks for the cryptocurrency.

Litecoin is at risk of breaking lower after surging three weeks in a row by 42 percent.

The silver cryptocurrency painted a “bearish engulfing candle” on August 2, a phenomenon that signals lower prices ahead. Vince Prince, the financial analyst who first spotted the bearish pattern, noted that LTC is going to visit a couple of lower levels in the sessions ahead.

Mr. Prince further supported his bearish bias with another structure: a “huge falling resistance” that this week rejected Litecoin’s upside move. Excerpts from his analysis:

“The tremendous falling resistance has confirmed [another Litecoin move] to the downside with a [significant] protracted [bearish volatility]. And not only this but also with a bearish engulfing candle which confirms this strong move.”

litecoin, cryptocurrency, ltcusd, ltcbtc

Litecoin is confirming intense selling pressure near the falling trendline. Source: TradingView.com

Litecoin Support Levels to Watch

Mr. Prince recognized that LTC lacked the fuel required to log a breakout move above its falling trendline resistance.

Expecting a pullback, the analyst noted that the cryptocurrency would first test two of its provable support waves: the 100-period exponential moving average (red) and the 200-period exponential moving average (black).

He said Litecoin could use the levels to stabilize its short-term bearish bias. If that does not happen, then the cryptocurrency risks breaking down towards the horizontal support levels lurking between $49 and $50.

If they fail to hold the price as well, then a more significant crash would take LTC to the bearish zone, as shown in the chart above.

The lower level of the…

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