Traders must be cautious of this negating Litecoin’s bullish thesis

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

Litecoin’s turning point was on 23 July after its price closed above its upper sloping trend. This marked a shift from LTC’s downtrend which extended from its late-May levels. The digital asset is now preparing to reclaim areas lost over several retracement stages in June.

At the time of writing, Litecoin was valued at $144.8, up by 4.5% over the last 24 hours.

Litecoin Daily Chart

Source: LTC/USD, TradingView

The Pitchfork tool was plotted on LTC’s rally from its 2o July swing low of $103.8 and the following correctional phase. The decline saw buyers return at LTC’s 78.6% Fibonacci Extension which rested at $137.68. The next resistance zone is at the 100% Extension level and a close above this can push LTC towards the median line of the Pitchfork ($150).

Additional targets lay at $158.58 and $173.45. To invalidate such an outcome, the market’s bears need to target a decline below the 78.6% Fib level.

Reasoning 

After bouncing back from the oversold zone on 20 July, the RSI formed its second peak at 63. A higher peak would indicate further upside going forward. The On Balance Volume also pointed to a rise in northbound pressure over the past few days.

However, LTC could see a minor decline before the next upcycle is initiated. This assertion can be backed by the MACD’s histogram which showed that bulls were losing momentum as the price approached $146.88. Failing to topple this ceiling might result in a retest of $137.68.

Conclusion

Litecoin’s close above its 100% Fibonacci Extension would validate a hike towards the $150-mark. However, there were signs of weakening bullish momentum and traders must be cautious of a close below the 78.6% Fib level. This scenario would negate a bullish thesis for LTC over the coming days.