Litecoin (LTC) Price May Have Started A New Rally, This Is A Potential Target
The price of Litecoin (LTC) has made a deviation above the long-term resistance level, signaling a potential upcoming price decline. However, short-term indicators suggest that the LTC price will reclaim this level and continue to rise.
Ascending triangle pattern
The Litecoin (LTC) price has been trading within an ascending triangle pattern since December 19, 2022. This is a bullish pattern that often leads to breakouts in most cases.
Indeed, the LTC price broke out of the triangle during the week of June 26 – July 2, with a large bullish candle. However, the following week’s bearish candle pushed the price back below the triangle’s resistance at $104, potentially turning the previous breakout into a deviation (red circle). If so, a sharp decline may follow, and the LTC price could drop to the triangle’s support line at $74.
However, a positive sign is that the subsequent bearish candle closed within the range of the bullish candle from June 26 – July 2 and had lower volume. The weekly RSI indicator has bounced back from the previous resistance line (green arrow) and is above 50, indicating a favorable position for the bulls.
Therefore, there is still a chance for LTC price to break above the $104 level once again and rise higher. If successful, it could reach the next resistance level at $135.
Taking a closer look at the daily timeframe, it can be observed that the downward movement from the local high at $115 is merely a correction within an uptrend.
This is because the price bounced back from the 0.618 Fibonacci retracement support level ($94.17) of the recent price increase (green arrow). According to Fibonacci retracement theory, after a significant price move in one direction, it is expected to retrace back to a certain level before continuing the initial trend. In this case, the bounce from the 0.618 Fib level suggests it is just a correction within the uptrend.
Additionally, this level coincides with a previous high, adding further significance to it.
The daily RSI indicator has also bounced back from the 50 level, supporting the continuation of the uptrend.
Therefore, there is a possibility for LTC price to retest the recent local high at $115 in the coming days.
Although the LTC price has made a deviation above the long-term resistance area, the technical indicators suggest that it will reclaim this level and rise higher. The immediate target is $115, and potentially even higher to $135.
This view would be invalidated if the LTC price drops below the support area of $91-$94 and the weekly RSI indicator falls below 50. In that case, it could decline to the support line of the ascending triangle at $74.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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