Litecoin [LTC] & Dash Price Action: Double Divergence Setting Litecoin up for a Drop?
Litecoin recorded a strong performance last week. The price closed near the weekly highs and price overcame two key levels during price action amid the week.
Price started the week overcoming the point of a breakdown in November and overcame the point of a breakdown in October near the end of the week.
However, price failed to maintain levels above the October breakdown point and fell back below the level before the weekly candle closed.
Litecoin may now be setting up to underperform with a double bearish divergence forming between the price and RSI.
A double bearish divergence forms when price forms a series of higher highs while the RSI forms a series of lower highs.
This shows price continuing to increase despite buying pressure falling.
A single bearish divergence typically has low predictive power, but it is a much stronger signal when a double divergence forms.
This combined with the price being rejected above the October breakdown level gives greater odds to Litecoin moving downward from here.
After two days of consolidation where Doji candles formed, Dash is following up with an increase today that is making it the top performer in the top 15 cryptocurrencies by market cap.
Data from Messari show price increasing 9.15% over the past 24 hours at the time of writing. Most other top cryptos have increased in the range of 1-5%.
Price has increased to the point of a level which has acted both as support and as resistance in prior price action.
The price rose above the level, which lies at $88, but has since dropped back below showing traders rejecting valuations above.
If price can manage to rise above this level, the next key level to monitor is $95 which has been an area of both buyer and seller liquidity in prior trading.
The shorter term 4-hour chart shows that the increase took place in recent trading.
Prior to the increase, the price had been trading in a range from $79 to $83 and tested the outer bounds of the range several times before breaking above in the most recent candle.
- Litecoin could be setting up for a reversal with a double divergence forming between price and RSI on the daily chart.
- Dash is the top performer in the top 15 cryptocurrencies after breaking above a key range.
- Dash surpassed a key level at $88 but has since fallen back below.
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