- Litecoin faces bearish pressure as sellers hold the upper hand due to resistance at $65, with BTC’s correction adding complexity.
- Key indicators, like RSI and CMF, show increased selling pressure, while short positions in LTC futures rise significantly.
Litecoin (LTC) has been navigating a challenging path in the cryptocurrency market as bears apply pressure on its price. The recent correction in Bitcoin (BTC) has further complicated the situation, stirring concerns among LTC traders.
In the Litecoin market, sellers currently possess the upper hand as they continue to exert pressure on its price. Although bulls managed to stage a rally from the $57 support level in the past week, the $65 price zone has proven to be a formidable obstacle, stifling any substantial buying momentum.
Analysis of LTC Price
Litecoin’s price movements in August displayed notable volatility, with bears asserting dominance around the $72 resistance zone and bulls finding solace at $57. The pivotal $65 price level has acted as dynamic support and resistance, depending on the market’s prevailing buying or selling sentiment.
Source: LTC/USDT on Trading View
Recently, bulls concluded a daily trading session above the $65 price zone, signaling their willingness to utilize this level as a support zone for further advancement. However, this bullish momentum proved short-lived as sellers rapidly pushed the price down by 7%. At the latest update, LTC is trading at $64.82, and sellers have promptly reinstated a resistance level at $65.
The Relative Strength Index (RSI) has descended below the neutral 50 level, while the Chaikin Money Flow (CMF) has transitioned into negative territory. These indicators underscore heightened selling pressure and capital outflows from Litecoin.
In the futures market, traders are progressively initiating short positions for LTC. At the time of writing this article, short positions account for $30.54 million, constituting a significant 54.62% share of open contracts. With the CMF indicating moderate capital outflows, Litecoin is likely to revisit the $57 to $60 support zone.
Positive Prospects Emerge
Despite recent bearish pressures, signs of a potential bullish trend for Litecoin are emerging. The daily timeframe technical analysis reveals that LTC broke free from a 74-day descending resistance line on September 15. Such breakouts typically signal the conclusion of a bearish trend and the initiation of a new upward trajectory.
The period leading up to this breakout witnessed bullish tendencies. Between August 17 and September 11, Litecoin established a double-bottom pattern, coupled with a bullish divergence in the RSI. This divergence materializes when a price decrease coincides with an upsurge in momentum, often heralding significant upward movements.
As the RSI approaches the 50 threshold, market participants closely monitor its trajectory. If it sustains an upward trajectory beyond 50, it could grant an advantage to the bulls. Thus potentially propelling Litecoin’s price by 25% to the $78-$85 resistance area. However, should bullish momentum falter, a 12% descent to the $55 support area may become the prevailing outlook.
Short-Term Breakout Signifies Positivity
The short-term six-hour analysis further underscores the bullish sentiment. Litecoin’s price successfully escaped a shorter-term descending resistance line, marking the onset of an upward trajectory. Moreover, the breakout resulted in the reclamation of the $62.50 horizontal area, expected to serve as a support level.
In this shorter timeframe, the RSI has ascended above 50, confirming this level as support. All indications suggest a bullish scenario, implying a 25% price increase. Nevertheless, the price dip below the $62.50 horizontal support could invalidate the breakout, potentially leading to a drop to $55.
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