LTCUSD Technical Analysis for 09/08/2017 – Short-Term Selloff Signal

LTCUSD Technical Analysis for 09/08/2017 – Short-Term Selloff Signal

LTCUSD has been trending higher but there are signs of rally exhaustion on the 1-hour time frame. Price failed in its last two attempts to break past the 83.00 area, creating a double top formation visible on the short-term chart.

The 100 SMA has also crossed below the longer-term 200 SMA so the path of least resistance is to the downside. This means that a selloff is more likely to materialize than for the uptrend to resume. Price has yet to break below the neckline around 76.00 to confirm the potential drop. In addition, the moving averages around 75.00 could hold as near-term support.

Stochastic is turning higher without even hitting oversold levels to indicate that buyers are eager to push LTCUSD back up. RSI is on the move down, though, so sellers might still have a shot at pushing LTCUSD to the 62.00 lows.

Cryptocurrencies have been in consolidation mode for the past couple of days as traders are awaiting the next major catalysts. The rallies have stalled when China announced a ban on ICO funding, likely dampening activity in the one of the world’s largest digital currency markets.

However, geopolitical risk could still come into play and this tends to lead to significant gains for litecoin and other cryptocurrencies. This was the case when North Korea tested missile launches as the prospect of an actual war or nuclear strike has boosted demand for safe-havens and digital gold.

Dollar demand has also taken a hit ever since the August NFP was printed as the downbeat figures chucked September hike expectations out the window. FOMC policymakers have also recently warned about weak underlying inflation and how hiking too soon might do more harm than good.

With that, traders are looking to weekend events and updates on the North Korea situation that could significantly impact market sentiment in the coming week. Indications that the tension is subsiding could be bullish for stocks and commodities, drawing traders away from LTCUSD.