Litecoin is a peer-to-peer cryptocurrency that was launched in 2011 by Charlie Lee as a “lighter” version of Bitcoin. Litecoin (LTC) recently witnessed a significant drop, halting its upward trend recovery after a minor uptick earlier in the week.
However, in short, Litecoin (LTC) has gone through some struggles lately since a brief bounce. Despite this early-week bounce, its price fell off dramatically as it went through a very low daily trading volume of nearly 3%. As the analysts keep looking for a weaker sign in the market today, they are seeing potential levels of a more significant price correction or possibly a rebound for LTC.
LTC: Recovery Stalls After Price Rejection
Litecoin declined very quickly the past week, yet it experienced some kind of temporary pullback yesterday. LTC met resistance on an important level, repelled there lightly, then turned down. This price action has brought the price of Litecoin back into the negative trend of the day, and sellers are worried about which way it is moving.
Following a very nasty fall last week, LTC temporarily supported its price and started bouncing back, with an outlook to regain more. Indeed, for some time, it even looked like the digital currency was getting ready to begin yet another rally. The resurgence proved to be short-lived because of a key rejection and now it has resumed dropping once again, showing market weakness.
The $100 Psychological Level: A Turning Point
One of the major watch points is the psychological $100 level. A drop below this could signal a larger market correction, pushing LTC to the $70 region. Traders are watching closely for this threshold as it may be the deciding factor for the next price move.
In the 4-hour chart, LTC is showing a lower lows and lower highs pattern that may be the beginning of a bearish cycle. If the price continues going down, then a major market reset could be on its way.
However, the market structure is still slightly bullish in the medium term. This correction may be part of a healthy reaccumulation phase that sets up for a future upward rally when LTC finds a strong support level.
Important Support and Resistance Levels to Watch
As LTC continues its correction, the following support and resistance levels should be monitored to determine future price action:
Important Support Levels:
- $100: Psychological level; further fall needs to be stopped at this level.
- $87: The low of last week; further fall may reach this level.
- $78: Next possible support in case LTC continues falling.
Key Resistance Levels:
- $114.3: Former support turned resistance.
- $131.5: A break here may give way to a better rally.
- $147: Resistance that halted buying momentum weeks back. A breakout here may lead to a bullish rally.
If LTC breaks through the resistance level of $114.3, further recovery towards the levels of $131.5 and $147 may be triggered. This would confirm a reversal in trend and may signal the start of a new bullish rally.
Litecoin: Predictions
Despite the recent downtrend, analysts still believe LTC has mid-term bullish prospects as it consolidates into a larger upward rally. If LTC can break and hold above the $114.3 resistance, it will open the door to possible recovery towards $131.5 and even $147 during the following weeks.
Possible Scenarios
Bearish Scenario: If LTC falls below the $100 threshold and then fails to hold at either $87 or $78, it could plunge to the $70 area.
In case a breakthrough above $114.3 is successful, there should be a recovery phase ahead, targeting higher levels at $131.5 or further above it.
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Conclusion: Litecoin is seeing a short-term reversal based on rejection at a significant level and a 3% daily decline. On the intraday chart, the price is weak and would be important for making decisions on further moves when the psychological level of $100 is crossed. Falling below $100 may be subject to further declines into the $70 region.
Even though there is a bearish trend at present, the short-term for Litecoin remains optimistic. That means if LTC can find support and rally back above the resistance areas, a bullish rally can become part of the setup. There is a need for traders to follow up with key support and resistance levels to know what next lies ahead.
Since LTC remains bullish in the short term and over the medium term, this correction could potentially be a healthy reaccumulation phase before setting up for gains.
Also Read: Bitcoin Drops To $95K After 135% Surge: Will MicroStrategy Spark New Inflows?
