Price chart analysis suggests litecoin could soon revisit record highs.
If so, the development would mark a reversal from last week, when the world’s fifth largest cryptocurrency reached new heights at $341.80, only to lose ground to bull market exhaustion.
However, most notably, the subsequent dip to $251.22 on Dec. 15 low is now proving short-lived.
As of Monday, LTC is trading back above $300, averaging $320 across global exchanges. As per CoinMarketCap, it has appreciated by 0.4 percent on the day, but the sharp recovery only underscores the market’s strong “buy the dip” mentality.
And with the huge bitcoin (BTC) bull run showing some signs of fatigue near the $20,000 mark, investors could once again turn their attention towards litecoin and other alternative currencies.
The investor community also appears to expect LTC to re-test record highs soon, hinting that its already meteoric annual gains could be extended from its already staggering 7,000 percent.
Litecoin 4-hour chart
The above chart (prices as per Coinbase) shows:
- A series of higher lows as represented by the ascending trendline (blue line).
- Rounding bottom along the ascending trend line support.
- The 50-MA is curled up in favor of the bulls.
The above listed technical factors are aligned in favor of the bulls. Still, the job is only half done as prices need to break above the resistance offered by the bear flag pattern (essentially an upside down version or the inverted version of the bull flag).
It is a bearish continuation pattern, i.e. a downside break (close below $317) would signal a continuation of the sell-off from the high of $420. Still, in the short-term, the dips below $270 could be transient, courtesy of the upward sloping 10-day MA.
Only a break above $345 (flag resistance) would add credence to higher lows, rounding bottom pattern and shall open doors for $420 levels (record highs).
Litecoin image via Shutterstock
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Please conduct your own thorough research before investing in any cryptocurrency.
Source: Coin Desk