Litecoin: Can bulls initiate a reversal?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- 6.1% gains propelled LTC toward the $80 psychological level.
- Rising mean coin age hinted at network-wide accumulation.
Litecoin [LTC] jumped 6.1% in the last 24 hours to continue its rally from the $72 support level. The selling pressure on LTC flipped its market structure to bearish after the break of the bullish trendline and critical $80 support level. However, bulls halted the bearish momentum at the $72 support level, rebounding to trade at $77.5, as of press time.
Realistic or not, here’s LTC’s market cap in BTC terms
With Bitcoin [BTC] posting gains of 4% over the same period to push it to $26.5k, LTC can look to record more gains, due to its correlation with BTC.
The rally is on…
Litecoin’s rejection from the $97 resistance level on 3 June ushered in a massive selling wave. This saw LTC smash the support levels at $85 and $80 respectively.
Another downward move on 14 June saw Litecoin reach the March low of $72. In this case, bulls quickly defended the support level and rallied with five successive bullish candles on the 12-hour timeframe.
This revealed the strong buying pressure at the $72 support level and the readiness of bulls to reclaim some lost territory, as price edged toward the $80 psychological level.
Buyers can be encouraged by the bullish crossover on the Moving Average Convergence Divergence (MACD) indicator. This hinted at growing bullish momentum in the short term. The Relative Strength Indicator (RSI) also climbed strongly out of the oversold zone and stood at 41, as of the time of writing.
For a sustained bullish reversal, buyers will need to clear the hurdles at the $80 resistance level and break above the trendline. These will be two critical zones where bears will look to interrupt the bullish rally and force prices back down.
How much are 1,10,100 LTCs worth today?
Shifting tides in futures market as mean coin age rises
Data from Santiment revealed that the 90d mean coin age has been on a steady uptrend since 10 June. It hinted at an increased accumulation of LTC which could translate to more buying pressure.
The four-hour liquidation data from Coinglass showed that shorts took a beating across several coins in the futures market and LTC shorts weren’t left out. About $565.82k worth of shorts were wrecked, accounting for 98% of liquidations. These signaled buyers gaining the upper hand, as LTC looks to reverse its recent losses.