Litecoin: What next after $90 defense?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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- The market structure was bullish on the daily timeframe.
- The defense of the $90 area saw the CVD stabilize.
Litecoin [LTC] has soared higher on the price charts, while the rest of the crypto market faced strong selling pressure. Over the past five days, LTC bulls could drive prices above the $90 supply zone and flip it to a region of demand.
Realistic or not, here’s LTC’s market cap in BTC’s terms
Litecoin network activity was rising and its correlation with Bitcoin [BTC] dropped, showing that sentiment was firmly bullish. But Litecoin faces significant obstacles to the north. And, despite the fall in correlation, a plunge in BTC prices could negatively impact LTC as well.
Litecoin trades within a range formation, but bulls have some room
The price action of Litecoin showed bullish momentum in the past ten days after a large wave of selling pressure at the start of May. The $90 area was retested as resistance on 3 May, but within three weeks, the bulls flipped it to support.
This was accompanied by a hugely positive reading on the Chaikin Money Flow, showing a significant capital influx into the LTC markets. The RSI also climbed past neutral 50 to indicate a shift in the trend.
The break in the recent lower high at $91.64 meant that the market structure was bullish as well. To the north, a daily bearish order block from May 2022 sat at $104. $105.71 is the highest LTC has ascended in the past year, and bulls will likely aim to change that.
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The slow rise in Open Interest showed sidelined speculators were willing to bid once more
The defense of the $90 support zone saw the spot CVD flatten out on 20 May, after the decline it saw in the preceding two days. This showed that buyers were bidding for the asset, and could drive another move upward.
The Open Interest had been flat over the past two days as well, but was inching higher on the charts. It was not as quick as the previous week, but the trend remained upward. Along with the bounce in LTC prices, it can be concluded that short-term speculators were also bullish. While the prospects of a move to $100 looked good, a rally above the yearly highs was dubious.