Litecoin Technical Analysis: LTC’s uninspiring price movement doesn’t bode well for “digital silver”
Daily Litecoin (LTC) Price Analysis
- Litecoin is currently sandwiched between the $85 resistance and 20-day SMA (support).
- LTC has formed a double-top in the daily chart after failing to break above the $89.60 resistance.
- The monthly chart is on the verge of charting the Adam and Eve pattern.
Founded by Charlie Lee, Litecoin is one of the most popular cryptocurrencies in the world and is often known as the silver to Bitcoin’s gold. Over the last three days, Litecoin has been trending horizontally and is priced around $83.50. It looks like the price is sandwiched between two strong levels ($85 on the upside and the 20-day SMA on the downside). Overall, the situation looks pretty bearish for LTC. Let’s do a technical analysis to gain a deeper perspective.
Doubletop rejection precedes lethargic activity
LTC jumped from $47 on October 21 to $89.60 on November 24. However, the $89.60 resistance has been exceedingly tough for the buyers to break through. The bulls made another attempt on December 3, but they failed to do so again, forming the highly bearish double-top pattern. Since then, the digital silver has found support at $79.50 and has been trending horizontally. The MACD indicates that market momentum is becoming increasingly bearish, so further downward movement is expected.
LTC/USD daily chart
To judge how far the price may potentially drop, we shall look at the 4-hour LTC/USD chart. As you can see, the price here is sandwiched between the $90.50 resistance line and the upward trending line, forming the triangle formation. If the price breaks below the formation, technical analysis tells us that the price target will be around $60.
LTC/USD 4-hour chart
On the flipside, if LTC breaks out above the triangle and manages to break past the previously insurmountable $89.60 resistance barrier, the price should move past $100 and reach $107. The last time Litecoin was priced in the triple digits was back in August 2019.
Monthly chart shows future price explosion?
Apparently, the monthly chart shows some major potential gains. The LTC monthly chart is forming an Adam and Eve pattern. This technical pattern could push the price to $225. Adding further credence to the bullish outlook is the MACD pattern which shows increasing bullish market momentum.
LTC/USD monthly chart
We need to wait and see if this bullish hypothesis holds over the next few months.
Key price levels to watch
Since the price will likely go on a short-term downtrend, the critical level to watch here is the 20-day SMA ($84). This level has historically been very solid and has repeatedly managed to hold the price up. However, if the 20-day SMA fails, the price will likely drop to $60.
On the upside, the $89.60 resistance barrier has managed to thwart the price, again and again, resulting in a double top. However, if the buyers manage to somehow flip the script and break past $89.60, they will push LTC above $100.