Litecoin (LTC) tries to bounce back after being rejected by the long-term resistance

Litecoin (LTC) has turned down since being rejected by the long-term resistance zone of $ 238.

Litecoin is expected to consolidate between the current local highs and lows before finally breaking out.

Litecoin’s long-term level

The weekly chart shows that LTC has declined since reaching a high of $ 246.40 on Feb. 20.

The rejection happened right at the 0.618 Fib retracement level, measured from an all-time high.

Despite the subsequent rejection and decline, technical indicators remained bullish. Both the RSI and the Stochastic oscillator are increasing.

While the RSI has produced a bearish divergence, the result is a drop that has occurred. It is possible that LTC will also produce a potential bullish divergence at its next low.

Weekly LTC / USD chart | Source: TradingView

Current movement

Tradaer Altcoinsherpa has outlined an LTC chart, indicating that whether or not the price will successfully break above the $ 186 level will determine the direction of the next move.

Source: Twitter

A look at the daily chart shows that LTC is trading inside the $ 180 area, previously acting as a resistance. While the LTC is still in the process of validating it, the area is expected to act as a support.

However, the technical indicators have not been decided yet. The RSI has just crossed below 50 and the Stochastic oscillator can create a bearish cross.

Hence, a breakdown or bounce of LTC from the $ 180 zone will be a key factor in determining the next trend.

Daily LTC / USD chart | Source: TradingView

Wave count

The number of waves indicates that LTC has completed the third (white) extension of a bullish impulse starting March 2020.

LTC is likely to be in wave four. It is expected to continue to correct before it is likely to break out again and attempt to hit new all-time highs.

If a correction (wave four) could develop into a triangle or a running flat, LTC could have bottomed out.

LTC / BTC

The weekly chart shows that LTC / BTC is trading very close to the all-time low of ₿0.003.

The technical indicators are showing signs of bullish reversal, evident by the bullish divergence in the weekly RSI. However, the trend cannot be considered bullish until LTC recovers to its previous breakout level at 0.0055.

Doing so will confirm that the long-term trend is bullish.

Weekly LTC / BTC chart | Source: TradingView

Conclude

Litecoin is expected to continue to consolidate before finally breaking out.

While LTC / BTC is showing signs of strong bullish reversal, the long-term trend cannot be considered bullish until it breaks above 0.005.

Leave a Reply