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Litecoin back to the drawing board as LTC rally culminates

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  • Litecoin has dipped lower after two failed attempts to take over the 200-day Simple Moving Average.
  • Sellers have taken over from the buyers, and price action is descending further down.
  • A return to the bandwidth between $135 and $156 looks like the sanest move to attract buyers again.

On August 16 and again on August 23, Litecoin (LTC) tried to reach the 200-day Simple Moving Average (SMA). Both tests failed and what followed each time was a quick reversal. After August 16, the green ascending trend line, originating from July 21, could provide enough support for buyers to stay in the rally and build up momentum for a second attempt.

With the backbone gone, the price will drop like a pudding

The second attempt on the 200-day SMA, hovering around $193, failed again, but this time the rejection after that was so heavy that it broke the green ascending trend line. With the backbone of the rally broken, sellers eagerly saw their awaited queue to step in and start selling. Buyers reattempted to reclaim but got rejected to the downside against that green ascending trend line and the monthly R2 resistance level at $181.56. 

The general sentiment is not helping either, with most major cryptocurrencies in the red and global markets in a very nervous place.

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LTC/USD daily chart
LTC/USD daily chart

LTC is looking for support that might be found short-term at $163. That level falls in line with the monthly R1 Resistance, although that level has been chopped up already quite a lot in the past few weeks. Expect a further run downwards toward $160. 

That level might be a key one for short-sellers to take profit. Buyers can already step in here and even make it a fade-in trade. Once below $160, expect to dip in that red band region between $138 and$156. This region will act again as a distribution zone where buyers and sellers will hand over the position, so buyers should be able here to reclaim. Add the 55-daily SMA in as an additional factor, and then expect a run-up again to $180 once this correction is behind for Litecoin.

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Litecoin: These signals lend more credence to a bearish trend as opposed to a rally

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September has been full of mini-crashes in the cryptocurrency market. While some alts have overcome several waves of selling pressure, others have struggled to regain lost ground. Litecoin was somewhere in between. The alt trimmed its losses at a support line of $145, recovered by 14% but was still below levels of bullish control.

To assert its dominance, LTC needed to close above certain key levels. However, the market aligned more favorably for sellers, who were ready to ramp up the pressure. At the time of writing, LTC traded at $151.4, up by 4% over the last 24 hours.

LTC Daily Chart

Source: LTC/USD, TradingView

LTC’s support around $145 has been key ever since the 19 May crash. This defensive area prevented multiple breakdown attempts in early-June and transitioned to a daunting resistance during July. The region was once again under the spotlight after LTC declined by 24% over the past week. This was certainly a positive sign as a strong support mark quelled yet another round of selling pressure.

However, LTC needed to claw back some important levels to attract more buyers to the market. The most immediate barrier lay at $165, from where the confluence of the 50 and 20 SMA’s would be targeted. The final resistance lay at the 200-SMA (green) around the $190-mark. A successful close above the aforementioned areas would put buyers back in the driving seat, which would allow for a push above $233.

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However, this structure would be lost in case LTC closes below $145 on strong volumes. The price could drop as low as $103.7 if selling pressure overwhelms the buyers. Moreover, the indicators backed an unfavorable prediction after slipping below crucial areas.

Reasoning 

For the moment, LTC indicators aligned more favorably for sellers than buyers. The MACD and Awesome Oscillator weakened below their half-lines and exposed the market to short-selling. Moreover, the candles were now below their EMA Ribbons- a reading which normally marks the beginning of a bearish trend. If buyers fail to adapt immediately, LTC was greatly exposed to another sell-off.

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Conclusion 

Considering LTC’s indicators, its support of $145 would be under immense pressure once again. A close below this defense would open the doors to July lows of $134.8, $118.5 and even $103.7. For a bullish outcome, LTC would need to topple $165. This would carve a path towards $233.

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Litecoin Forecast and LTC/USD Analysis September 23, 2021

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LTC/USD are traded at 153.41 and continue to move as part of the fall and the beginning of the “Head and Shoulders” reversal pattern. The capitalization of the Litecoin cryptocurrency at the time of the publication of the forecast is $10,324,843,517. Moving averages indicate a short-term sideways trend in Litecoin. Prices broke through the area between the signal lines downward, which indicates pressure from the sellers of the asset and a potential continuation of the fall from the current levels. At the moment, we should expect an attempt to develop a rise in the value of a digital asset and a test of the resistance level near the 170.05 area. Where can we expect a rebound again and the continuation of the fall in the Litecoin rate with a potential target below the level of 105.05.

Litecoin Forecast and LTC/USD Analysis September 23, 2021

An additional signal in favor of a fall in LTC/USD quotes will be a test of the downward trend line on the relative strength index (RSI). The second signal will be a rebound from the Neck line of the “Head and Shoulders” reversal pattern. Cancellation of the coin fall option will be a strong growth in the value of the asset and a breakdown of the 230.05 area. This will indicate a breakdown of the resistance area and a continued rise in the cryptocurrency rate with a potential target above the level of 295.05. With the breakdown of the support area and closing of quotations below the level of 135.05, we should expect confirmation of the development of a downward trend in Litecoin.

Litecoin Forecast and LTC/USD Analysis September 23, 2021

Litecoin Forecast and LTC/USD Analysis September 23, 2021 suggests an attempt to correct and test the resistance area near the level of 170.05. Where can we expect a rebound and the continuation of the fall in LTC/USD to the area below the level of 105.05. An additional signal in favor of the fall in Litecoin will be a test of the trend line on the relative strength index (RSI). Cancellation of the reduction option will be a strong growth and a breakdown of the 230.05 area. This will indicate a continued rise in the cryptocurrency with a target above the level of 295.05.

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Litecoin Price Analysis: LTC finding support around $150 after a rapid downtrend

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  • On the same day, Litecoin price dropped to $150.73 during intraday trading.
  • LTC dropped another 13% after it broke out at $182 last Friday.
  • The volume of trading has increased by 31% to further validate the concerning trend.

LTC/USD is down to $150.73, a new low for the year. This week, Litecoin‘s price decline has accelerated, with the coin declining as far as $150. On September 7, LTC reached a 30-day high of $231.33 before experiencing a severe sell-off in the weeks that followed.

Litecoin’s price then rose to $189 during a consolidation period, bringing the project’s total market value to nearly $1 billion. Since then, the currency has witnessed significant selling in the market, sending it back to $160.27 as of this writing. 

On the 24-hour chart of Litecoin price activity, red candlesticks have dominated recent trading sessions, confirming the bearish outlook. The Relative Strength Index (RSI) is at a depressingly low 39, indicating that there was no buyer interest in the currency.

At the moment, the price is not expected to rise anytime soon. If price can prevent any additional selling and maintain above $160 support, a consolidation there might be the best possible outcome for LTC.

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LTC/USD 4-hour chart: LTC set to reverse from the $165 support? 

On the 4-hour chart, we can see that the Litecoin price is making a move to reverse higher as the $165 support level has provided strong resistance.

Litecoin Price Analysis: LTC finding support around $150 after a rapid downtrend 1

LTC/USD 4-hour chart. Source: TradingView

The Litecoin price has risen by over 80% from the previous swing low of $105. However, further advances were unable to be made during the last weekend, with only a slightly higher high set.

The price of Litecoin corrected to $230 after reaching $250, where it found support. The previous resistance point, around $165, was achieved on Monday and has provided solid protection thus far.

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Overall, unless the $165 support line breaks, we should expect LTC/USD to reverse over the weekend and resume its path to the $190 major resistance. The next objective for Litecoin to breach is $200 once the $190 has been broken.

Litecoin Price Analysis: Conclusion 

The Litecoin price is on the rise today, as investors continue to trust in the $165 support after a severe sell-off last week. As a result, we believe that bears are spent, and LTC/USD will seek to recoup some of its losses over the next 24 hours.

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