The altcoin market has been surging over the past couple of days owing to the Bitcoin rally. With a market capitalization of $13.92 billion, Litecoin [LTC] was also trading at a high price of $208. The price of the digital asset witnessed a surge of 4.69% overnight pushing its value higher by $10.
At the time of writing, selling pressure was rising and the coin may be looking at an incoming drop.
Litecoin one-hour chart
Source: LTCUSD on TradingView
The above chart of Litcoin [LTC] highlighted how the value of the digital asset plunged as low as $190 on Thursday, after which it bounced back. It surpassed various levels of resistances and was currently at a high value. However, due to the sudden surge, the market has turned volatile and paving the way for a correction.
Reasoning
The Bollinger Bands has diverged and there was a vast gap noted. This gap was an indication of the high volatility in the Litecoin market and this made the market more vulnerable to selling pressure. Meanwhile, the signal line and 50 moving average remained significantly under the candlesticks highlighting the strong uptrend in value.
Whereas the Relative Strength Index which was headed towards the overbought zone was met with resistance as the price approached $211. As the price remained under this level, the RSI began to see the entry of more sellers in the market. Even though the signal remained close to the overbought zone, the volatility may push the value of LTC lower in the short-term.
Crucial levels
Entry-level: $208.15
Take profit: $202.45
Stop-level: $211.28
Risk to Reward: 1.82
Conclusion
The above chart of Litecoin noted that the price of the digital asset hit resistance at $211 and was consolidating under this level. LTC may witness a small correction in the short-term as the sellers remained active at the current price and continue to sell the digital asset.
