Litecoin [LTC] bulls defend $50 with their lives, but were their efforts in vain?
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Bitcoin [BTC] was able to rise past the $20.7k resistance level but faced more selling pressure above the $22k mark. At press time, the king of crypto was trading at $21.5k. The move upward from the $19k area over the past week saw Litecoin [LTC] climb meekly from $48 to $52. However, despite the tough fight to reclaim the $50 area, an uptrend was not yet established.
LTC- 6-Hour Chart
In late May, Litecoin established a range from $60 to $74. In early June, the price fell sharply beneath this range. The swing high and low of this move were used to plot the Fibonacci retracement levels (yellow) on the price chart.
In general, 61.8%-78.6% retracement area offers stiff resistance. The 38.2% retracement level is also key, as the price generally retests this level as support before moving upward to the 61.8% level.
For Litecoin, it can be seen that the 38.2% level has acted as a solid resistance area over the past two weeks. Therefore, buying opportunities would likely not arrive until the $53 level was flipped to support.
On lower timeframes, the $50-$52 zone was important, and LTC bulls continued to fight to establish dominion over this belt.
Despite their tough fight, the indicators showed that the buyers had not made much progress. The Relative Strength Index (RSI) did not show a trend in progress, even though it was above neutral 50. In fact, it has oscillated between 60 and 40 for the better part of the past month. This hinted at a range more than a strong trend behind Litecoin.
The On-Balance Volume (OBV) was also moving sideways over the past month, and we can infer that buying pressure has somewhat died out in recent weeks. The Chaikin Money Flow (CMF) agreed with this inference, as it has failed to climb past +0.05 in the past three weeks of trading.
Litecoin managed to halt its plunge at $48, and also climb past the $50 mark. Yet, it was not sufficient evidence to point toward a move higher for LTC. The $53 level was critical. A flip of this level to support can offer a buying opportunity targeting $61.