Litecoin bulls have had to negotiate through multiple bearish signals in the market. Refusing to bow down to a bearish head and shoulders pattern and RSI’s double top has allowed the alt to maintain its upwards trajectory. In fact, bulls could be further rewarded if LTC breaks north of its broadening wedge setup. At the time of writing, Litecoin traded at $179.8, up by 5% over the last 24 hours.
Litecoin 4-hour chart
Source: LTC/USD, TradingView
LTC’s reversal from the $135-137 price range (neckline of head and shoulders pattern) marked an important development which preserved its northbound trajectory on the charts. The renewed buying pressure helped LTC diverge from its 50-SMA (yellow) after successfully closing above the $146-mark.
LTC seemed to be riding north at a faster pace based off this momentum and a broadening wedge pattern indicated further upside. Although LTC failed to capitalize on an early breakout after forming a newer high at $158.86, another attempt seemed likely over the coming sessions. Closing above its 5th June swing high of $185 could heighten chances of a favorable outcome- which would push LTC towards the next resistance zone of $190-$200. From there on, some retracements can be expected especially since the daily 200-SMA (not shown) coincided with the aforementioned ceiling.
Reasoning
The last few days have seen RSI test the overbought territory on multiple occasions. This also resulted in a double top formation which triggered a decline towards the half-line. On the plus side, RSI seemed to be on its next leg forward, which meant that bulls had successfully negated this bearish setup with minimal losses.
DMI also steered clear of a bearish crossover and continued to flash favorable market conditions as the +DI line traded above the -DI line. Finally, the OBV held on to its uptrend due to sustained buying pressure.
Conclusion
Considering the pace at which bullish momentum is rising, another short-term surge was on the cards. Traders can long this pattern once LTC successfully closes above $185. Take-profits can be set between $190-$200.
