Litecoin price analysis 16 Nov: is the dip a buying opportunity?

Litecoin is at a critical juncture

AMC Empire 25 theatre on 42nd St in Manhattan at night                                 
Adoption of litecoin could increase following AMC Entertainment’s news that it plans to accept the cryptocurrency for online payments – Photo: Shutterstock
                                

The Litecoin Foundation tweeted on 14 November that users can make payments with litecoin wherever VISA is used. The VISA debit card issued by Litecoin would not charge any additional transaction fees and convert the crypto into US dollars in real-time. The card will have a monthly fee of $5.

In another positive news announcement, Commonwealth Bank of Australia tweeted that it had become the first bank in Australia to allow its clients to buy, sell, and hold cryptocurrencies, including litecoin, in the bank’s CommBank app.

Litecoin’s adoption could further receive a boost after AMC Entertainment starts to accept litecoin for online payments on the website and mobile app. AMC CEO and chair Adam Aron said during the company’s earnings call recently that it was on track to start accepting crypto payments before the end of the year.  

Will Litecoin go up after the recent correction or will it give up all the gains accrued in November? Let’s see what charts project. Read our LTC price analysis to find out.

Litecoin price technical analysis: weekly chart

A candlestick chart displaying the price of Litecoin on a weekly basis
Litecoin technical analysis, weekly – Credit: Currency.com

LTC’s price skyrocketed above the stiff overhead resistance at $233.02 and closed last week at $279.15, recording gains of 38.19% over the previous week’s closing price. This break above $233.02 indicates the start of a possible new uptrend.

However, the bears have other plans. They are attempting to pull the price back below the breakout level at $233.02. A break and close below this support could trap several aggressive bulls who may then rush to the exit.

The LTC/USD pair could then drop to the moving averages. Such a deep correction could delay the start of the next leg of the up-move.

Contrary to this assumption, if the price rebounds off $233.02, it will suggest that bulls are buying on dips to this support. The level will then act as a launchpad for the next leg of the uptrend.

The buyers will then attempt to push the price above $295.06. If they succeed, the pair could pick up momentum and rally to the next major resistance at $413.28.

The Litecoin price analysis shows that the 20-week exponential moving average (EMA) has started to turn up and the relative strength index (RSI) is in the positive territory, indicating that bulls have the upper hand. 

Litecoin price technical analysis: daily chart

A candlestick chart displaying the price of Litecoin on a daily basis
Litecoin technical analysis, daily – Credit: Currency.com

LTC’s price surged from $190.99 on 6 November to $295.06 on 10 November. This pushed the RSI deep into the overbought territory, indicating that the rally was overextended in the short term.

The bears aggressively defended the psychological level at $300, as seen from the long wick on the 10 November candlestick. Thereafter, the pair consolidated between $282.35 and $243.19 but the failure of the bulls to drive the price above the overhead barrier may have prompted profit-booking today.

The pair has plunged to the 20-day EMA where the bulls are attempting to arrest the decline. If they manage to do that, the pair could again attempt to resume the up-move.

This positive view will invalidate if the price slips and closes below the 20-day EMA. Such a move may accelerate selling and the pair could drop to the 50-day simple moving average (SMA).

Litecoin buy or sell at current levels?

Litecoin price analysis shows that bulls are attempting to defend the 20-day EMA. If they succeed, the pair could again attempt to climb to $295.06. The bulls will have to push the price above this resistance to signal the resumption of the uptrend. A break and close below the 20-day EMA could indicate the start of a deeper correction.

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.

Litecoin to US Dollar
Daily change
189.49
Low: 185.84
High: 195.27

Further reading

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