Litecoin is wriggling out of its current losses in hopes of printing new highs.
Technical Indicators suggests LTC bullish run might be imminent.

On-chain signals seem to be looking good for Litecoin (LTC) as key data hints at a potential bullish trend reversal. After reaching its Year-to-Date (YTD) high in July, the price of the coin dived significantly after battling a major resistance at the $85 price level.

Precisely, LTC’s daily time frame technical analysis confirmed that it fell from its yearly high of $115 on July 3rd. By August 17, it finally reached an unbelievable low of $56, indicating that the Litecoin halving event did not impact positively on the price. 

LTC price began to increase almost immediately after it hit the said low point, pushing through the green line as shown below. It wasn’t long before the token returned to its previous low again as bear pressure remained steady following the broader trend from the general market. 

However, the decline could not hinder LTC from creating a double-bottom pattern combined with a bullish divergence as marked by the Relative Strength Index (RSI) indicator. It is worth noting that the presence of such double-bottom patterns usually suggests a breakout.

Hence, a breakout from the descending resistance line is expected. Should this finally happen, it would mean that the price correction has been completed and the bottom is in. Generally, traders leveraged the RSI to confirm price movement, checking whether a market is overbought or oversold, and in the long run, they consult the results to decide whether to accumulate an asset or sell it. 

Usually, when the RSI is below 30%, it suggests that the market is oversold, and when the RSI is above 70%, the market is said to be overbought. Again, recording readings above 50 as well as seeing a rising trend signals an advantage for bulls, while readings below 50 indicate the opposite.

Strong Bull Signals Hovers Around LTC

Litecoin breakout from the descending resistance line can translate into an increase of 37% to the next resistance point at $85. Noteworthy, the resistance is created by the 0.5 Fibonacci retracement resistance level. Inversely, a failure to break through the line is likely to cause a 20% decline in the $50 horizontal support area. 

It is still bound to reach this level by the beginning of Q4 2023 if the price continues to push below the descending resistance line. 

The analysis of LTC’s six-hour time frame technical analysis further underscores the bullish signals discovered on the daily timeframe. The analysis shows that there is also a significant bullish divergence in the six-hour RSI. While LTC has had a breakout from the short-term descending resistance line, a breakout from the long-term descending resistance line is expected to take the price above the $85 resistance area.

The presence of LTC long-term holders may also impact positively on the price of the coin as their refusal to sell is considered a very positive backing for the digital currency. 

Amidst these speculations, LTC has remained one of the cryptocurrencies with a strong market presence. The coin currently has a trading volume of over $250 million and a market capitalization of $4.6 billion. Many investors are seriously considering whether Litecoin is a good investment at this time and a look at these figures suggests that they may not be making a wrong choice should they plunge their funds into the coin.

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Filed under: Bitcoin - @ September 15, 2023 1:15 pm