- LTC/USD pair trading in bullish wedge formation since May 19 crash
- Litecoin could break out of the pattern and tap $145 in the near term
JAIPUR (Coinchapter.com) — Litecoin jumped 11% in the wake of a market-wide recovery on July 21. In the last correction that started July 12, the spot LTC/USD pair was down near $100.
Bulls took charge in the London trading session last noon and catapulted Bitcoin’s light counterpart to $117. However, the party seems to have just begun as LTC/USD is looking to chart a higher course up north.
Breakout From Bullish Wedge
Litecoin has been trading within a bullish wedge pattern since tumbling down from its all-time high of $413 in May. The LTC/USD pair tested the upper bounds of the wedge quite a few times during the downtrend.
The latest 11% jump hints at another restest of the wedge’s upper bound. And not just the upper bound of the bullish wedge but the extrapolated descending channel as well.
The point where the 50-day moving average (MA) wave and the upper bound of the extrapolated descending channel intersect lies at $145, a nearly 20% upside from current prices.
LTC/USD spot buyers would need to reclaim $125 and then keep the pressure on until a successful close above $145 is achieved. The MACD indicator just flipped green, hinting at the beginning of a new bullish cycle. RSI, too logged an uptick and is headed towards 44.05.
What Analysts Think About Litecoin’s Breakout
Amsterdam-based trader and analyst Michael van de Poppe hinted at a $219 spot price rally once $145/$146 breaks.
Another analyst who goes by the Twitter handle “@misconfig_exe” also presented a few technical arguments in the latest Tweet thread, which support a possible Litecoin’s bullish breakout scenario. For example, considering the Litecoin/Bitcoin ratio, the chartist said:
The LTC/BTC pair is a ratio of the value of LTC in terms of BTC value. Litecoin’s price has a demonstrated cycle range to Bitcoin price since 2011 – LTC acts as an oscillator on the LTC/BTC chart. Its descending trend is close to a breakout (more ltr)
He also supplied the below chart to support his analysis.
The analyst in the following argument pointed out how Litecoin is undervalued as compared to Bitcoin.
Litecoin has oscillated around 1.2% of bitcoin price, with cycle highs of 2.5% and cycle lows of .0042%. This ratio is expressed in $LTCBTC pair. The pair cycles from 0.025 LTC/BTC to 0.004 LTC/BTC. Current value is 0.00366 LTC/BTC, significantly undervalued compared to BTC.
Discussing the all-time lows at which the LTC/BTC pair is trending, misconfig_exe forecasted that a significant upward correction awaits Bitcoin’s silver.
Litecoin historically has grown 4x-6x more than Bitcoin from cycle lows. I speculate that Litecoin will grow 4-5x more than Bitcoin (short-term) when it pumps, as it is currently reaching all-time lows on the LTC/BTC chart.
But first, Litecoin bulls need to make the push to $145 before any other attempt at an upside. How soon will the said technical scenario play out? That remains to be seen.