- LTC price displays a bearish divergence forming on the 24hr chart, hinting at an upcoming fall.
- On-chain data shows 22% of Litecoin holders enjoy profit, further painting a bearish outlook.
- A breakdown of $55.23 will form a lower low, annulling the bullish case.
Litecoin price saw an impressive rally after the FTX-driven crush bottomed on 9 November. Meanwhile, the asset’s explosive moves place many investors in profit. Nevertheless, a slight retracement could be essential for LTC to stretch this upward move.
LTC Price Needs a Pause
Litecoin saw its price increase by 75% within two weeks, from 9 November. However, this massive upside seems to experience an absence of bullish strength, pausing its upside. As Litecoin rebounds from the support of $73.10, market players should consider two possibilities – a trend continuation or a minor retracement.
While the former is possible amidst strict conditions, the latter appears more likely for two reasons. A bearish divergence formed between the 6 November & 23rd high peaks and the RSI’s (Relative Strength Index) lower lows within that timeframe.
This discrepancy confirms a waning momentum, though LTC’s price continued to soar because of inertia. Nevertheless, the upside will unlikely sustain. Thus, market players should prepare for trend reversals.
Therefore, breaching the support barrier at $73.10 will likely witness the LTC price revisiting the middle level of the 75% surge at $65.63. Some scenarios would see the alt sweeping $61.30 & $58.24 zones. Enthusiasts should anticipate a 15 – 24% drop from Litecoin.
However, this pullback doesn’t show the end of LTC’s uptrend. Meantime, a swift revival beyond $65.63 will confirm bulls are in control. In such cases, market players can expect the alt to propel from $65.63 to retest the hurdle at $96.30, welcoming a 47% upside move.
The 30d Market Value-Realized Value indicator also supports downside possibilities for LTC. The on-chain index determines the loss/profit of people that bought Litecoin within the previous month. The index wavers at 22%, showing the average return for all individuals that acquired the token over the last 30 days is 22%. Profit-booking by these holders would magnify the selling momentum and catalyze a correction.
Though things appear bearish in the near term, Litecoin’s longer-term price picture looks promising, with the alt possibly attempting to revisit the crucial mark at $100. Nevertheless, failure to recover beyond $65.63 plus a 24hr candle closing under $55.23 will form a lower low to cancel LTC’s bullish outlook. That can trigger a 15% slump toward $47.60.