Litecoin is presently consolidating above the neckline at $1.700.
A technical analysis of the 240-minute LTC/USD price chart prevents me from buying into this market trap.
Litecoin Chart Structure – Even though Litecoin has broken above the neckline level of $1.690, it has not made any significant attempts to scale higher. Currently trading at $1.700, Litecoin must respect the support and repeatedly challenge the resistance if it is to continue rising.
Fibonacci Retracement – With this breakout, Litecoin has maintained its stance above the 61.8% Fibonacci retracement level of $1.668. As can be seen from the chart above, the cryptocurrency recently retested this support level. The bulls must now quickly overcome the 50% retracement resistance if they are to achieve the final target of $1.800.
Moving Average Convergence Divergence – The MACD and the Signal Line continue to progress towards the positive territory. The latest values of MACD and Signal Line are -0.0111 and -0.0253 respectively.
Momentum – The Momentum indicator reports a reading of 0.0880 bettering yesterday’s 0.0373.
Relative Strength Index – The RSI indicator reading has advanced to 50.1596. Bulls must make more attempts if they are to turn this tied game in their favor.
Conclusion
It does not happen very often that an H&S pattern breakout is followed by sideways consolidation. And in such a scenario, there is an even lesser probability that the pattern matures to meet the expected target. Hence, I would not recommend buying this market trap and would rather suggest sitting out this event. In case the price crashes below the $1.660, do create short positions for a target of $1.580 by maintaining a stop-loss above $1.690.