This comes after a 2-month period of price decline from its all-time high of $420. Litecoin found support near $100 which is a prior breakout level and is now at $224. To reach its all-time high level again, Litecoin still needs to increase its price nearly 100% from here.
The whole cryptocurrency market has been weak recently. If this strong week is the start of a new bullish phase, then Litecoin appears to be leading the pack and is certainly one to watch.
Let’s take a look at the technical analysis of Litecoin on multiple times frames, and see where things could go from here.
LTC/USD – Weekly Chart
We can see on the weekly chart that Litecoin found strong support at a prior breakout level, which was also near the 40-week simple moving average (SMA) and $100 level.
This confluence of three support levels has proved robust, with Litecoin’s price bouncing higher and breaking a major downward sloping trendline.
This major trendline has been tested multiple times over the last two months, so this breakout is a significant change in the price behavior of Litecoin.
The price is currently just above the 10-week SMA and if it stays above this level, it would be very bullish. The price may need to pull back or consolidate here though, before moving higher. As long as Litecoin does not run back down to and break below $100, it’s hard to make a bearish case.
Longer term bullish target is the all-time high at $420.
LTC/USD – Daily Chart
The daily chart shows us clearly how many times the major downward sloping trendline was tested and respected the last couple of months.
This breakout above it shows us that Litecoin has had a significant change in price behavior. The breakout has been accompanied by heavy volume, which is bullish and shows buyers are driving this move.
The price is above the 50-day SMA which is another bullish sign, especially if it can hold above it. The only bearish scenario is if the price moves down back towards $100 level on heavy volume and breaks below it.
LTC/USD – 4-Hour Chart
We can see previous areas of support and resistance here on the 4-hour chart marked in grey. These will like be areas of resistance and support on the way up if Litecoin continues higher.
These areas can be used by traders as guides for entering and exiting trades or placing stop losses and profit targets depending on their strategy.
If price continues higher from here the next key level to reach and break is $250. If the price pulls back, support may be found near $200 or failing that near $170.
The 4-hour chart also shows that there was a double bottom pattern before the breakout and a successful retest of the major trendline after breaking out. Both of these are bullish signals.
Key areas to watch:
- All-time high $420 – This is a longer-term price target.
- 10-week & 50-day SMA – Bullish if the price can hold above it.
- Previous S&R areas – Will likely be resistance and support areas on the way up.
- $100 price level – Bearish if the price moves down towards this on heavy volume or breaks below.
- $250 & $300 – Near-term price targets or resistance.
- $200 & $170 – Near-term potential support areas.
Will Litecoin continue higher towards its all-time high? Is it due to pullback here? Let us know your thoughts in the comments section below!
|DISCLAIMER: Investing or trading in digital assets, such as those featured here, is extremely speculative and carries substantial risk. This analysis should not be considered investment advice, use it for informational purposes only. Historical performance of the assets discussed is not indicative of future performance. Statements, analysis, and information on blokt and associated or linked sites do not necessarily match the opinion of blokt. This analysis should not be interpreted as advice to buy, sell or hold and should not be taken as an endorsement or recommendation of a particular asset.|
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