Key Litecoin Takeaways:
- Litecoin could decline back to $100, based on bearish technicals.
- Experts estimate a possible recovery for LTC after the drop.
YEREVAN (CoinChapter.com) – Litecoin, the 15th cryptocurrency with a market cap of $15 billion, traded at $224 in the New York session Thursday. The “digital silver” rallied 6% in the previous 24 hours. However, LTC bulls might not have much time to celebrate, as technicals point to a $100 crash in the upcoming sessions.
The outlook is based on a confluence of bearish factors. One of them is the Bearish Flag, most prominent on the weekly chart. In a Bearish Flag, the price action forms a channel with two parallel trendlines. As a result, they constrict the price swing and pump the value.
However, the Bearish Flag is a reversal pattern and foresees losses after the uptrend in the channel. The Litecoin flag formed after a sharp drop in mid-May, predicting a bearish continuation once LTC leaves the pattern.
The Fibonacci Retracement Levels confirm the outlook. In hindsight, the indicator pinpoints the best entries and exits on the chart. In other words, it attempts to predict the values where an asset might retrace, i.e., temporarily deviate from the current bias. Based on the Fibonacci sequence, 38,2, 50, 61.8, and 78.6% levels are the most significant.
LTC stood at the 50% Fib Retracement Level in the Thursday session, hinting at a possible reversal back to around $100.
Could the setback be temporary?
Michael Van de Poppe, the chief executive of Consulting platform Eight Global, analyzed the LTC/USD chart the previous week. He concluded that even though Litecoin could face a retracement, it was “going according to plan.”
The digital asset is still charting according to the analyst’s plan, as he estimated a decline back to $200 before LTC attempts to recover.
Moreover, crypto exchange Kraken’s November report claimed that another Litecoin pump is underway. The “digital silver” had phases of explosive growth in the past. The report specifically referred to Nov 2013, when LTC exploded from $5 to $63 in weeks, and to Dec 2017, when it grew from $50 to $369.
Litecoin is once again starting to see unprecedented demand and activity after having seen relatively underwhelming growth over the last several years. […] With LTC gaining momentum, many market participants wonder if history will repeat. On-chain activity shows, that not only has the network demand started to trend higher, and enter into a “growth wave,” but it also remains below the “overbought” territory.read the report.