There have been occasions in the past where Litecoin has led the rest of the cryptocurrency market.
This could be the case currently with Litecoin leading the market despite other major cryptocurrencies not following suit.
An inverse head and shoulders pattern formed for Litecoin which it has now broken out of.
The surge over the past two days has resulted in Litecoin breaking through two significant resistance points.
Price action broke through the neckline of the inverse head and shoulders pattern indicating that a continuation in upward price action is likely.
Price continued upwards and also broke above resistance at the daily 50 EMA.
Price has met resistance at the daily 50 EMA several times this year and has failed to break through significantly.
The black arrows on the above chart indicate each of the failed attempts at Litecoin breaking above the 50 EMA.
Litecoin managed to close above the 50 EMA yesterday and has followed up with another surge today.
In the event of a reversal, traders may anticipate the 50 EMA turning into support and seek long positions as it approaches.
The next area of seller liquidity to monitor is between $41.50 and $44.
During the mid-November’s bearish drop, this is where price action began trading in a range before continuing with another bearish drop.
The short-term 4-hour chart provides strong indication that price is likely to continue its upward trajectory.
Once price action broke above the neckline resistance of the inverse head and shoulders pattern, the price came back down to touch the neckline before continuing upward.
After touching the neckline, price action followed up by forming a Marubozu candle.
A Marubozu candle is a candle with little or no wicks and a long body showing strong movement in one direction.
The four-hour MACD and RSI also have both been increasing reflecting the buyer momentum.
There is a strong bullish outlook for Litecoin on both the daily chart and shorter timeframes.
Litecoin potentially could be leading the market, and other major cryptocurrencies may follow suit shortly.
- Litecoin is the only major cryptocurrency surging and has broken through key resistance levels including the neckline of an inverse head and shoulders pattern and the daily 50 EMA.
- Litecoin failed to break through the daily 50 EMA on numerous occasions but has now managed to close above and follow-up with a surge today. If price reverses from here, traders may look to take long positions as price approaches the 50 EMA.
- Shorter-term 4-hour timeframe also indicating bullish outlook with Marubozu candle formed and RSI and MACD increasing.