Disclaimer: The findings of the next evaluation are the only opinions of the author and shouldn’t be thought of funding recommendation
The general market sentiment has been bearish for the crypto-market in current weeks. Whether or not this can be a temporary interval of uncertainty earlier than the resumption of a bullish pattern for Bitcoin is but to be seen. Within the meantime, the altcoin market has taken a stronger beating. That is how the market operates, and it has bullish cycles adopted by occasions of sharp drops for sure weak altcoins.
Litecoin has survived for years and has a market cap of over $1 billion. Whereas Litecoin received’t be forgotten anytime quickly, it’s not resistant to drops of 30% or higher – We noticed one simply final week. Might one other comply with within the weeks to come back?
LTC- 12 hour chart
LTC was again within the $105-$110 space of demand that it had visited in June and July 2021. In July, the value bounced sharply from this space. Nonetheless, the latest take a look at of this demand zone was met with a lukewarm response from bulls.
The market construction was bearish as the value shaped a sequence of decrease highs and decrease lows. A set of Fibonacci retracement and extension traces (white) had been plotted primarily based on LTC’s drop from $219 to $129 in early December.
This gave the $104.7-level because the 27.2% extension stage. Usually, the value sees the earlier pattern stall on the 27.2% and 61.8% extension ranges, and these are areas the place the pattern may also start to reverse.
A reversal was not but in sight for Litecoin.
On the value chart, the 21-period SMA (orange) was shifting beneath the 55 SMA (inexperienced). The RSI on the 12-hour chart has additionally been under impartial 50 for the higher a part of the previous two months.
Taken collectively, this was an affirmation of bearish momentum. One other factor to notice was that when the 12-hour RSI closed under 30, it has often been adopted by additional losses over the following two or three buying and selling classes.
On the time of writing, the Stochastic RSI was climbing. This confirmed that bears had been as soon as extra gathering power to power one other leg downward.
Value seeks liquidity, and LTC was buying and selling inside a area of long-term demand. A bounce adopted by one other leg downward gave the impression to be possible for LTC over the following month. This bounce might climb as excessive because the $129-level. This stage represented the previous lows earlier this month and had confluence with the 55 SMA too.