Litecoin LTC Fails the First Real Test, As Cryptos Retreat
Litecoin was heavily bearish since the second week of May, after the crash in the crypto market, with the price falling to $105 and losing around 75% of the value. Although, it reversed higher last month as the sentiment improved in the crypto market and continued to make gains until yesterday.
Litecoin Forecast – LTC/USD Daily Chart
In total, LTC/USD gained around $75, which is an almost 75% increase in value. Buyers pushed above the 20 SMA (gray) and the 50 SMA (yellow) which were keeping Litecoin down on the daily chart, but the real test would come at the 2 larger moving averages, the 100 SMA (green) and the 200 SMA (purple) which have been acting as support and resistance before.
Yesterday we saw LITECOIN run up to these moving averages, which stand at $180 but failed to push above them and today the price is reversing back down. Although, this is more of a retrace down than a trend reversal, The 20 daily SMA (gray) should offer some support at $145-150, which is a decent support area, followed by the 50 daily SMA (yellow) at around $130-135.
Litecoin Forecast – LTC/USD H4 Chart
Litecoin challenging the 20 SMA on the H4 chart now
Switching to the H4 chart, we see that the smaller moving averages were providing support on retraces lower, particularly the 20 SMA (gray) and the 50 SMA (yellow). Right now, Litecoin is challenging the 20 SMA during this retreat, which seems to be quite fast. So, we’re refraining from buying Litcoin right now, but will follow the price action and probably go long lower, when the price action tells us that the decline is over.
Although, despite the bearish momentum in Litecoin in the previous three months and the poor performance, they were not reflected in its on-chain metrics. The increase in daily active addresses and whale accumulation are signs of traders’ long-term bullish sentiment. So, the forecast points up for LITECOIN , which keeps us on the bullish side, once the decline is over.