Litecoin (LTC) price analysis: Rally to come if pattern breaks
Litecoin may pick up momentum if it breaks above the descending triangle pattern
Litecoin has been trying to form a bottom near the psychological support at $100. After a sharp recovery on Wednesday, the buyers are attempting to sustain the higher levels as of 5 May 2022.
Tightening monetary conditions and the uncertain geopolitical situation have dampened sentiment in the crypto sector in 2022. This may be one of the reasons for the sharp dip in litecoin’s trading volumes compared with the previous year.
Be[In]Crypto research highlighted that litecoin’s trading volume slumped 87% from roughly $674.92bn in the first quarter of 2021 to $82bn in the first quarter of 2022.
Although the price and trading volumes are down significantly from the previous year, one metric just hit a new all-time high. Charlie Lee, founder of litecoin, tweeted on 4 May that litecoin’s mining hashrate hit a new high of 500TH/s (tera hashes per second). Lee said that the milestone was achieved because of dogecoin, as both are being mined together “to secure both networks”.
The Litecoin Foundation announced a partnership with leading digital currency mining platform Antpool to form the digital currency research laboratory LTC Labs. The newly-formed entity will focus on various aspects to trigger growth in the Litecoin ecosystem. Antpool will support LTC Labs by donating 50% of the monthly revenue earned from its litecoin mining pool.
In another positive sign, crypto payment processor BitPay revealed that litecoin was the second most popular crypto payment option, accounting for 15.5% of all crypto payments in early 2022.
Could litecoin make a comeback? Will litecoin go up? Read our LTC price analysis to find out.
Litecoin price technical analysis: Weekly chart
LTC’s price has been attempting to hold the psychological support at $100. Although the bears pulled the price below $100 last week, they could not build upon the advantage. This suggests a lack of selling at lower levels.
The buyers are attempting to start a recovery that could reach the 20-week exponential moving average (EMA). This is an important resistance to keep an eye on because the bulls have not been able to push the price above it for the past several months.
What is your sentiment on LTC/USD?
Conversely, if the price turns down from the current level or the overhead resistance, it will suggest that the sentiment remains negative and traders are selling on rallies. A break and close below $91 could signal the start of the next leg of the downtrend.
Litecoin price technical analysis: Daily chart
LTC’s price has formed a descending triangle pattern, which will complete on a break and close below $91. The price rebounded off this support and the bulls pushed the pair above the 20-day EMA on 4 May.
The bulls are attempting to sustain the price above the 20-day EMA. If they succeed, the pair could rise to the 50-day SMA. A break and close above this level could open the doors for a retest of the resistance line of the triangle.
This is an important barrier for the bulls to overcome because if they manage to do that, the negative descending triangle pattern will be negated. That may attract buying from investors who may have been sitting on the sidelines due to the formation of the bearish setup.
The 20-day EMA is flattening out and the relative strength index (RSI) is near the midpoint, suggesting that the bulls are attempting a comeback. This positive view will be invalidated if the price turns down and plummets below $91.
Litecoin: Buy or sell at current levels?
Litecoin’s price is attempting a recovery and it could rise to the resistance line of the descending triangle. A break above this level could start a new upward move. Conversely, litecoin price analysis suggests that bears will gain the upper hand if they pull the pair below $91.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.