Is Litecoin (LTC) giving "bull trap" vibes? Technical setup shows …

litecoin ltc looks bearish — Image by Pexels from Pixabay

Jaipur (CoinChapter.com) — Litecoin (LTC) buyers looking to capitalize on the cryptocurrency’s recent uptrend might be in for some trouble. Technical charts show that after a two-day-long rally, a dip and is inevitable.

LTC/USD supported but…

…bears have taken over Litecoin’s relief rally. It seems as if the upsurge was nothing more than an exercise in booking quick profits. On the 4-hour chart, Bitcoin’s “light” counterpart remains supported above the 20-day exponential moving average (EMA). But sustained bearish pressure might not help much and erase most of the recent gains.

litecoin, Is Litecoin (LTC) giving “bull trap” vibes? Technical setup shows so — LTC/USD Giving Off Bull-Trap Vibes On The 4-Hour Chart, Source: LTCUSD on TradingView.com

A break below the 20-day MA (moving average) will confirm the bearish trend reversal. Further movement down to the 50-day MA will confirm a “lights out” situation.

Gameplan

Until critical supports like the ones mentioned above are broken, this is nothing more than a pullback before another rally. As per the cryptocurrency market insights platform CryptoWatch, LTC trades in 87% correlation with Bitcoin (calculated over 30 days). What this means is that the crypto asset will mirror almost all price moves of its parent.

The BTC/USD 4-h chart shows buyers entering new positions after a brief selloff. However, things look shaky for LTC. Nonetheless, owing to the close correlation with Bitcoin, Litecoin might also experience buying pressure soon.

Long-term investors may want to play the wait and see the game. For swing traders or short-term investors, it is advisable to exit all positions and book profits. Because on the 1-hour chart, the LTC/USD pair has dipped below the 20-day EMA and 20-day MA and testing support at the 50-day MA.

Although buyers have started showing up, it will take multiple successive green candles (with breakouts above 20-day EMA and 20-day MA) to confirm an uptrend.