Litecoin (LTC) Price Faces Critical Test at Long-Term Support Level

litecoin with its 7-day chart

Litecoin, the silver to Bitcoin’s gold, stands at a crossroads. Prices currently hover above a critical 600-day support trend line, a key technical indicator shaping its trajectory for over a year and a half. While a recent dip found temporary footing on a lower support level, regaining its prior range low remains elusive. Can Litecoin hold its ground above this pivotal line, or will it succumb to the downward pressure? Analyzing LTC’s technical situation and market forces holds the key to understanding its potential path forward.

Things Looking Bright Long-Term

The price of Litecoin (LTC) is currently hovering above a significant long-term support trend line that has been in place for over 600 days. While the cryptocurrency experienced a minor bounce at a lower support level recently, it has struggled to reclaim its previous range low. This article analyzes whether Litecoin can maintain its position above this crucial support level.

Examining the weekly chart, it becomes evident that the LTC price has been steadily rising alongside an ascending support trend line for nearly 600 days. This trend line has been validated multiple times, including the most recent instance this week. Moreover, the trend line coincides with a horizontal support area, further strengthening its significance.

Recent Price Action

Although Litecoin initiated a bounce in August 2023, it failed to sustain the upward momentum and once again approached the support trend line. Additionally, the Litecoin team recently announced the expansion of EDX, an institutional exchange that supports trading for Bitcoin, Ethereum, and Litecoin, into the Asian market.

The weekly Relative Strength Index (RSI), which is used to assess whether a market is overbought or oversold, currently displays a bearish reading. An RSI above 50 and trending upwards suggests a bullish advantage, while a reading below 50 indicates the opposite. In this case, the RSI is below 50 and declining, indicating a bearish trend.

Potential Breakdown

Litecoin chart

Analyzing the six-hour time frame, it appears more likely that the LTC price will break down from the long-term support level. The price action reveals a descending resistance trend line that LTC has been trading under since December 2023. The most recent rejection occurred on January 12, resulting in a breakdown from the $68 horizontal area.

Although LTC experienced a bounce at the $63.50 horizontal support area, this level is relatively minor compared to the $68 range. Furthermore, the six-hour RSI is displaying bearish signs after breaking down from a preceding bullish divergence trend line.

Price Targets:

If the LTC price falls below $63.50, it could potentially drop by 8% to the next nearest support level at $60.50. However, reclaiming the $68 area may trigger a 12% increase, leading to a test of the resistance trend line at $73.

Litecoin’s price is currently at a critical juncture as it tests a long-term support trend line that has been in place for over 600 days. While the weekly RSI reading suggests a bearish trend, the six-hour time frame indicates a potential breakdown from the support level. Traders should closely monitor the price action and key support and resistance levels to gauge Litecoin’s future direction.

Author: Dominion

Domie loves writing and building cool stuffs.