Litecoin [LTC] hovers above key support zone – is a reversal likely?
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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- Bulls looked to defend $80 support level.
- There was a slight advantage for buyers in the futures market.
Litecoin [LTC] posted gains of 1.5% over the past 24 hours to briefly halt its bearish slide. This signaled a potential bullish reversal, as this coincided with price hovering over the key support level of $80. A recent price report highlighted the $80 psychological level as a key one for bulls.
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With Bitcoin [BTC] recording similar gains of 1.6%, more gains could be in view of LTC.
Bulls holding onto $80 psychological level
Following LTC’s price dip from the $102 price zone, it found support at the $85 support level. From 20 April to 5 May, it ranged between the $85 support level and $91 resistance level before selling pressure took price to the key $80 level.
On the daily timeframe, the $80 level remained significant for bulls with a bullish order block lying just above the support level. Bearish momentum also waned around the $80 level and bulls rallied to keep the price just above the $80 level.
On-chart indicators supported the likelihood of a bullish reversal. The Relative Strength Indicator (RSI) hovered over the neutral 50 mark after a strong push from the oversold zone. The On Balance Volume (OBV) also recorded a decent uptick and the Chaikin Money Flow (CMF) showed more funds flowing into LTC with a reading of 0.1.
As such, a rebound is likely if bulls can successfully defend the $80 level with a strong four-hour candle close above the support level. If BTC continues its short-term attempt to reclaim $29k, this could see LTC rally to $91 again.
Alternatively, bears could make another effort at cracking the $80 level. A successful attempt could see more aggressive selling towards March lows of $65.
Read Litecoin’s [LTC] Price Prediction 2023-24
Longs hold a slight advantage in futures market
According to Coinglass, LTC’s open interest rates oscillated between the $311M – $320M range over the past 24 hours. At press time, the OI stood at $319M–expressing modest bullish sentiment around the $80 level in the futures market.
Similarly, the LTC long/short ratio revealed long positions had a slight 50.07% advantage. Although the spread was little, buyers could attempt to use this as a springboard for short-term gains.