Litecoin: Stuck below a resistance, here’s what it needs to do to trigger a 10% jump
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
As foreseen in the previous article, the 13 April break from its reversal pattern led Litecoin (LTC) to test the $114-zone over the last week. Still constricted by the shackles of its 20 EMA (red), LTC dived to retest its two-month trendline support (green).
A likely repetition of its historical tendencies would expose LTC to a reversal towards the $110-$112 zone before entering a squeeze phase. At press time, LTC traded at $104.42, down by 1.72%in the last 24 hours.
LTC Daily Chart
LTC’s market structure was wobbling from the after-effects of the recent falling wedge (white) drop, as LTC was unable to advance above key resistance levels. Moreover, the trendline resistance (white, dashed) has served as an important area of value for the investors/traders.
After the buyers guarded the 14-month-long support near $98, LTC saw an over 45.9% ROI from its yearly low on 24 February. But with the 23.6% Fibonacci resistance posing limitations, the sellers quickly pushed the price below the 20/50 EMA.
Also, while the 200 EMA (green) still looked south, the bears kept the long-term trend under their influence. Considering the intersection of the trendline support and the horizontal floor at the $104-mark, in addition to the falling wedge (green), LTC positioned itself for a short-term revival. But with the increasing gap between the 20 EMA and 50 EMA, the sellers would likely curtail substantial recovery attempts.
LTC’s indicators skewed in favor of the bears. The Relative Strength Index is crammed near the 40-mark floor. A revival from this level would heighten the chances of a short-term revival. This reading also meant that sellers were in control of the market, and possible gains would rather be momentary.
With the southbound CMF refraining to propel a comeback rally, the money volumes into the crypto have dropped considerably in the last four days.
A break above the recent falling wedge was well within the conceivable realm for LTC. But with the diminishing state of its EMA’s, buyers could face barriers in the $110-$114 zone.
To flip the current outlook in favor of buyers, LTC needs to close above $114 backed by strong volumes. Additionally, LTC shares a monstrous 93% 30-day correlation with the king coin. A close eye on Bitcoin’s movement would be imperative to make a profitable move.